Before showcasing your home, you have spent a great deal of time preparing and consulting with your Real Estate Professional and have determined a realistic pricing strategy; a clear understanding of your bottom line; predefined conditions you are willing to accept; and terms that align with your preferences.
Armed with this information, you are now well-prepared to assess any offers that come your way against your initial criteria. Upon receiving an offer your Real Estate Professional will scrutinize these offers, ideally identifying one that closely aligns with your goals.
Simultaneously, your Real Estate Professional may utilize negotiation tactics to address other adjustable elements. Working on your behalf, the agent considers the interests of both the buyer and seller, employing persuasion and negotiation skills honed through specialized training.
Mindset:
You have finally received an offer! You are so excited! You get the details and you lose your mind! How can someone be so unrealistic? My house is worth way more than that. It's difficult to not be emotional when an offer comes in less than ideal. This is when you need to remove emotion. If this is the only offer you have you need to try your best to get it to a point where you are happy with the conditions. Remember its a back and forth negotiation. A good rule of thumb is to never let the deal die on your end.
Assessing the Offer:
Prospective buyers will submit offers through their agents to your Real Estate Professional, who will then discuss the details with you to ensure a clear understanding of what is being presented:
Offers encompass key elements such as:
- Legal Names of the potential Buyer
- Legal Property Description.
- Purchase Amount Buyer is offering
- Possession Date
- Deposit Amount
- Chattels Buyer wants included in the sale
- Purchase Conditions, including financing, inspections, potential sale of buyers home, and other buyer conditions that are date sensitive
- Terms may include items like professional cleaning, septic service, title insurance etc.
- Irrevocable date, specifying the timeframe for your acceptance or counteroffer.
Negotiating the Offer:
It's important to understand that an offer to purchase is simply that. Nothing in this offer is binding until both parties agree and sign the contract. Once the offer is made you can counter all the items the Buyers put on paper. You can counter the price, the possession date, the deposit amount, the chattels requested, the condition dates. This is where you look at your bottom line and some of the predefined outcomes you set for your sale.
A negotiation is a give and take in an attempt to have both parties leave with something.
Here are some considerations:
- If you get your price will you allow for a shorter possession?
- If possession is important to you will you accept a lower price?
- If the possession is lengthy ask for a higher deposit
- If the buyer is looking for additional chattels is this something you would consider?
- Are you willing to go under contract when the Buyer still has to sell their home? (shotgun clause is applicable)
This process might go back and forth several times until both parties agree or come to a point of disagreement and the offer is withdrawn or rejected.
The offer once it is signed by both parties becomes a legally binding contract.
However if the negotiation is successful your property is now PENDING!
Multiple Offers:
Occasionally you may receive more than one offer on your property at the same time. If you get 2 or more offers you are in a multiple offer scenario. If you have 2 or more offers their are items you can do as a seller to enhance this process:
Disclose that you have more than one offer to all the buyers. This gives the buyers an opportunity to revise their offer given that they are now competing with other buyers. The risk is that a buyer may choose to not present in a multiple offer situation and may withdraw. Once offers have been submitted its important to review each offer independently and determine which offer you choose to negotiate. You can't negotiate with more than one offer at a time.
If you are successful with the negotiation you are PENDING.
PENDING Status:
When the offer is pending your home is under contract. During this time your home is still on the market and buyers can continue to view the home. A buyer may wish to make an offer. This offer can be considered and negotiated as a BACK UP Offer. The offer would include a term that this offer will become the primary offer if the current buyer does not satisfy conditions.
You may have accepted an offer with a Sale of Buyers Home condition. While your home is pending it is continued to be marketed as a active property. When a buyer makes an offer it can be considered and negotiated. Once an offer is accepted the seller can invoke the Shotgun Clause which is an agreed to amount of time (normally 48-72 hrs) for the Buyer to completely remove all their conditions. If the Buyer does not remove their conditions the offer you negotiated is now the primary offer and you are not fulling pending.
Purchase Price Deductions:
It's crucial to note that the purchase price does not represent the final amount you will receive, as additional fees will be deducted from the sale, covering:
- Legal fees.
- Real estate agent commissions.
- Bank-related charges, encompassing the balance of your mortgage and any prepayment or discharge penalties.
- Tax adjustments.
Thoroughly reviewing every detail with your agent is imperative. If any aspects are unclear, do not hesitate to seek clarification.
Before formally accepting and signing an offer, you can have your lawyer review it. This ensures that nothing has been overlooked, all components are legally sound, and your interests are fully protected.
Accepting the Offer:
Once satisfied with the offer, it's time to accept it. To solidify the contract, your Real Estate Professional will request a deposit from the buyer, with the Seller Brokerage holding the deposit in trust. Upon closing, the deposit will be applied to the overall purchase price.