Now that your home is on the market and Showings have begun, offers may also come in for your home. An offer comes in the form of a Purchase Agreement and it is typically delivered to your Realtor by a Buyer’s Agent. The offer will contain a lot of standard legal language, but there are also many variables and this is a crucial time. Your Realtor will discuss all of these with you. Negotiating on your behalf is one of the most important jobs of your Realtor.
Here are some of the major variables you need to consider:
- Purchase price- how much is the buyer offering for your home
- Seller’s contribution to closing costs- the buyer may ask seller to help with closing costs
- Possession date- will the buyer have possession at closing or at a predetermined later date
- Closing date- is the timeline to close acceptable for you
- Home Warranty- will the seller pay to provide one
- Items included in sale- buyer may ask for more than you anticipated including
- Earnest money- are they offering enough to make walking away uncomfortable
- Method of financing- are they getting a type of loan you will accept and putting enough down
- Preapproval letter- have they already been through an initial approval process
- Contingency- do they have to sell a property before they can buy yours
All Aspects of the Purchase Agreement Can Be Negotiated!
The purchase price is certainly of major importance, but it may be that other variables can make a deal desirable. For example, if the higher offer is contingent on the sale of another home that adds risk to your transaction. Or perhaps one buyer is asking you to pay a portion of their closing costs, or has a less desirable loan type (which means you will have more work to do to get the house approved), or wants you to close and vacate before your own next property is ready … these may be reasons to consider a different offer.
Any aspect of the Purchase Agreement can be countered. Perhaps you want to ask for 5 days after closing before possession, or you feel the offered amount of earnest money is too low- you may direct your Realtor to produce a counter offer for you to sign.
Counter Offers- What You Need to Know:
It is true that any item on the Purchase Agreement can be countered. But it is essential that you understand that, by not accepting the offer as it was made, you are REJECTING that offer. Your 3 choices are to accept the offer as it was written, to counter the offer, or to reject it outright. Both countering and rejecting release the buyer from any responsibility to abide by their initial offer. If you counter and they say no, you cannot go back and accept the first offer.
Counter offers are common. And they are useful. Sometimes this is how the other details like closing dates, settlement costs, and purchase price find the sweet spot of compromise between buyer and seller. But it is important to know that each time either side counters, it serves as a rejection of the previous offer, releasing the other side from having to abide by the terms of the counter offer.
If you would like more information about the process of negotiating a contract, feel free to get in touch: