Offers and Negotiations
Well, this is exciting – someone has made an offer on your home! A lot of work has gone into getting you to this point, and there’s still a lot to do. But that doesn’t mean we can’t get excited!
Once your property has been listed, your agent will be monitoring the traffic on the backend of the MLS site. Often, when a buyer likes your house they will come back for repeat visits. They will begin to compare, either in their minds or against information they find, whether the price is a good value for them. Their agent will do research to compare your property to what it is currently on the market and what has sold. They will then determine what they think the value is. At this point, they may make an offer, which might look very different, depending on the type of buyer.
- Emotional buyers – looking for something specific and ready to pay good market value when they find it.
- Slower to act, price-sensitive buyers – tend to be more tentative with an offer and focused on value. Waiting for “the right house”, which can often be a bit…unicorn-y (let’s pretend that’s a word for the moment) in its specificity.
- Deal hunters – these buyers are not emotional. They want to find the best deal possible, and they tend to be more plentiful in a buyers’ market.
It’s important to remember that some offers will be unreasonable as buyers try to test you. You’ll need to lean on your agent’s expertise to make sure that you have the proper context around what should be considered and negotiated. All the offers that are sent to your agent are reviewed, typically virtually instead of in person. An offer will include:
Offer Price. What has the potential buyer offered to pay for your home?
Possession Date. The buyer may have requests which might or might not match your needs, and this can be an important part of negotiation.
Conditions. If the buyer is acquiring a mortgage, a financing condition will be present. There may be additional conditions based on property inspections. If the buyer must wait to sell their home, there may be a sale of home condition; if you are selling a condo, the buyer will need a condominium document review condition. There may be other conditions which your agent will help guide you through.
Inclusions. What appliances and items are staying with the house that aren’t “attached” to it?
Additional terms. Anything that is outside of the typical contract terms (for example, replacing carpet before the buyer moving in).
Upon review of the offer, you and your agent will decide on one of the following three options:
Accept (not normally recommended for the first round of negotiations)
Reject (again, not normally recommended for the first round of negotiations)
Counter-offer – once an offer has been countered, the buyer now has the same three options, and the negotiations will continue until the deal is accepted or rejected by either party.
Ideally, you will receive offers early into your listing, when your leverage is highest and your chances of getting a good offer is at its best. Beyond that, it is important, especially in a buyer’s market, to at least attempt to work with incoming offers. Keep in mind that there are many other factors – including possession timeline, conditions, or terms – that can affect a deal beyond price. This is what your agent is here to help you figure out.
If everything goes smoothly and the contract is signed, you are on your way to the next stage of selling your home: the condition period