When you put your house on the market you have high hopes of getting multiple full price offers the first day. Unfortunately for most sellers, that rarely happens. Average marketing time in Freeport for a single family home is about 7 months. So when you do get an offer how do you know if you should accept, counter or reject.
You just got an offer so what do you do now? Your Realtor will help you go through the offer, show you the good and the bad elements and help you decide what the best way to proceed is. Sometimes the highest price offer isn’t necessarily the best option. It may not always be about price. Here are some other things you need to consider when looking at an offer on your home.
How much earnest money is the buyer putting down? Earnest money is a sign of the buyer’s “good faith” and usually the more earnest money the buyer is offering to put down, the stronger the offer. What are the contingencies the buyer is requesting? Most offers contain some contingencies, or provisions that must be met in order for the purchase to go through. Typical contingencies are financing contingencies, appraisal contingencies, inspection contingencies and home sale contingencies. There are other contingencies the buyer may request as well but these are the most common. The more contingencies a buyer puts in an offer, the greater the likelihood of potential issues or the chances of a contingency not being satisfied.
Some other things to consider are the kind of financing the buyer is looking to obtain and how much money they are using for a down
payment. A buyer that is obtaining a conventional loan and putting 30% down is usually a stronger buyer than someone obtaining a USDA loan with 100% financing. That doesn’t mean that the USDA buyer won’t be able to get their loan, but the process is a little more difficult with that type of financing. If the buyer has cash the financing contingency is not necessary so that eliminates the possibility of that condition not being met. The closing date is another item that may make an offer more or less attractive. A quick closing might be what you need or it might be terrifying if you haven’t found a new home to move to. If the buyer is making an offer contingent on the sale of their current home you will need to be prepared for the chance that thy may not get their home sold in a timely manner. Without the sale of their current home, they can’t buy yours so even if they are offering full price, that may not be your best option.
Your Realtor can help you decide if you should accept an offer the way it has been submitted or if you should make a counter-offer. Any change you make from the buyer’s original offer becomes a counter offer and the buyer could move on to another home. Make sure you are prepared for that possibility if you choose to counter. Counter offers can go back and forth as long as both parties continue to negotiate. If you come to terms then you have an accepted contract.
Either party can reject a counter and end the negotiation at any time before acceptance. If your home has been on the market for a while or if you are in a situation where you need to get your home sold, you should give serious consideration to any offer you receive. While most offers aren’t perfect, negotiating can usually help both sides arrive at a point that the parties are comfortable as long as you are negotiating in good faith. Remember you don’t know when or if you will get another offer and what the terms of the next one might be. It is true what your Realtor has probably told you: “The first offer is usually the best offer”
so don’t make an emotional decision that you might regret in 6 months when your house still hasn’t sold. Instead of stubbornly insisting you need a $1000 more than the buyer would pay and now you have reduced your home by $5000 and had no other offers, you could be settled in to your new home!