Evaluating Offers
Pricing is only one factor to consider when reviewing an offer on your home. It's important to review the entire offer - with all of its terms and conditions - when making a decision.
Consider these areas when evalutaing any offers you receive from interested purchasers.
Price
Obviously, price is a major consideration. How close is the offer to your asking price? Is the market strong - do you have a good chance of getting more if you wait?
Contingencies
Virtually all home purchase contracts have some
contingencies - and many of these are extremely reasonable. But it's important to consider the potential of these conditions to affect or terminate the transaction. It may be advisable to accept a lower price with few contingencies over a higher figure with a large list of conditions.
Prequalified Buyers
Buyers who are pre-approved for mortgage financing are among the strongest purchasers. Not only do these buyers already have funding in place - they are also typically among the most credit-worthy buyers.
Beware the Home Sale Contingency
Offers are sometimes conditioned upon the sale of the buyer's current home prior to the closing. This is an extremely onerous condition. You simply trade the risk of selling one home for that of selling a different one - and you have far less control over the marketing of the buyer's house.
Seller Financing
Some offers are contingent upon the seller taking back financing. The exact terms can vary considerably, however it is usually not advisable to accept this type of deal unless there are no alternatives. Apart from the fact that most sellers want to cash out in order to buy a new home, holding a mortgage can be risky, involving costly legal enforcement actions if the borrower defaults. With the number of mortgage programs available from lenders, a buyer who demands financing from the seller is probably a high-risk borrower.
What Does the Buyer Want You to Do?
Few homes are in perfect condition, yet a buyer may expect to receive yours in pristine form. A purchaser who expects to buy a 50-year-old house in flawless condition is unrealistic - and could turn out to be a difficult buyer. While you should expect to repair any
major problems, beware of a purchaser who seems excessive in his or her demands.
Handling Multiple Offers
If you are fortunate enough to receive multiple offers, make sure to review each one carefully. If one party is significantly stronger than the other(s), or one offer has fewer conditions you may want to try work with that buyer first. After reviewing the terms of the offers - and discussing them with your agent - you can submit a counter-offer to all of the parties.
Counter-Offers and Negotiation
Negotiation is very common in the real estate markets. When you receive an offer for less than the asking price you have three choices - accept it, reject it out of hand, or make a
counter-offer.
No matter how carefully you research the market and how fairly you price your home, there's a decent chance you'll get at least one offer that is well below the market value of your home.
While many people get upset or angry by these offers, the proper way to handle them is unemotionally. Simply send a polite refusal to the buyer. If the buyer cannot or will not come up to your price level you've lost nothing. If he or she is simply fishing to see how low you will go you haven't lost any negotiating ground at all.
Whatever you do, don't take it personally. Selling your home and moving is stressful enough - don't drive yourself crazy over a bottom fisher trying to get a deal.
