Your home has been active on the market and you have been getting some showings. You hear that you may have an offer coming in and the excitement is growing here is what you should expect.
First to burst the bubble just because you hear you may be getting an offer doesn’t mean one is actually coming. Quite often a buyer will really like a home and tell their agent they are wanting to or thinking of making an offer. The agent will probably relay that message to your agent who in turn will relay it to you. Unfortunately, bad things can happen at this stage and an actual offer.
They could get cold feet. Traditionally one spouse always likes a home more or less than the other so sometimes the compromise is to do nothing. I usually tell my sellers don’t get excited until it closes. This can be a very daunting and frustrating time. And depending on the market it could take a few days prior to an offer even getting to you after you hear thru the grapevine that you may be getting one. So try to have a stress management plan in place for this very stressful time.
When the offer comes in it probably is never what you’re expecting. So be prepared for the unexpected. This is one of those times that hopefully you have been well prepped on how an offer may look. It is a good idea to have had a how does an offer look conversation with your agent for some different scenarios.
Some of the things you should or could expect is a variety of terms, requests for things that you didn’t think of etc. It’s always a good idea to have a very good idea of what your home may qualify for home loan wise. For instance, there are some circumstances where a home may not qualify for certain types of home loans. It is very wise to have had that discussion prior to having an offer in hand. Not all agents are aware of what qualifies for each type of home loan this is where you are going to lean heavily on your listing agent to help you sort this out. You don’t ever want to take an offer when there is no way that it can come to fruition. That is just wasting your marketing time.
Buyers may ask for all types of concessions from you. From paying their closing costs to making their offer contingent on the sale of their home or contingent on a variety of other options that suit their situation. You can never be prepared for everything that can come at you but you can certainly be prepared for some of the most common situations.
All things are negotiable that is one of the most important things to remember. Now there are some situations where a certain amount of flexibility may be the glue that holds your transaction together so you are going to want to consider that as you are walking thru the process.
Some of the things that you can do to be prepared for this day is
- Know your payoff on your mortgage
- Know if you have any additional liens on your property and know the dollar amount owed.
- Try to have an idea of your answer if someone should want the refrigerator, washer, dryer, or anything else that is special to your home
- Have a general idea of how much time you need to move. Everything is negotiable and sometimes this is a hard thing to have determined but if you can have an idea it will help you sort out what is most important to you. Sometimes if offers are close and you have a clear idea of the time you need and what it will cost you if you don’t get it sometimes that helps sort out the actual price difference in competing offers
You should have a good idea of some of the fees associated with selling your home. If you are living in Washington you have an excise tax that is charged to you. Today it’s 1.875% who knows about tomorrow. Idaho you pay your property taxes in arrears so depending on the time of the year you are selling that bill could be a substantial amount. There is a seller title fee, usually, you share closing costs if you have a well or a septic tank there could be additional fees there also. Traditionally pumping the septic tank prior to close is a sellers expense. Depending on your buyer you may have some well expenses in the form of a water quality test or a water quantity test.
Of course, everything is negotiable but you should have a good idea of what things can be. I usually try to prep my sellers the fees will be about 1 to 1 1/2 percent of the sales price if you live in Idaho and about 3 to 3 1/2% if you live in WA. That is a little over most of the time but that should give you a starting point. Throw in the commission you agreed to and as long as you are not paying buyers closing costs you should be in the ballpark of what it’s probably going to cost you.
When the offer shows up there are a lot of fluid parts to the offer. The first thing everyone asks is what is the price. That is important but there are a lot of things that truly affect that number. When you look at an offer there are some key parts to pay attention to.
As an agent, I am checking the legal description, the address, earnest money and the bones of the offer. Then we dive into the offer.
The offer is broken up into several sections as I see it.
- How are they paying for it? Or what we call the financial contingency section. Are they pre-approved for the mortgage they are getting. If they are cash did they provide proof of funds? Are they going to do a mortgage that would be easy to complete on the home in question? If you are looking at 2 identical offers other than the type of mortgage then the question is which one has the best chance of succeeding. How much cash are they coming in with? Do they have some skin in the game?
- What are they asking for to be included in the sale? Is that doable for you?
- What type of inspections are they going to want to be performed? Who is paying for them? What are the chances of them being successful? Does this open you the seller open to any liability or if they are asking you to pay for them, what is that going to cost you? These are the little things that you really want to look at before the price they came in at.
- Do they have any other contingencies? Sale of a home, early occupancy, or anything else they can muster up? Contingent on spouse looking at home, or parents or a variety of things that can boggle your mind someday.
- When do they want to close the deal? How much time does that give you? Is that adequate?
- Closing fees: are they asking for anything special? Their closing costs, paid surveys, well inspections, etc. Anything that is going to take away from your bottom line.
This is a great time to be making a net sheet! Your agent should have one for you!
When you are done looking the offer over. The big question really is what does not work for you? Everything is negotiable remember. So if some of those terms are not something that you can work with I always recommend a counter offer. And I am going to suggest even if its the worse low ball offer you could ever dream of send them a counter offer anyway. You just never know who is testing the water and who isn’t. So always counter even if it’s probably a waste of time.
Usually, when you have received the offer there is a section in there that gives you a timeframe to respond to the offer. You want to be mindful of that as not responding in time could nullify your offer. If you are happy with the offer you sign it and accept it and return it to the buyer. Remember it is not an accepted offer without delivery so getting it back to them asap is important. If you are going to counter you still sign the original offer contingent on the attached counter offer and it gets delivered.
If you send them back a counter offer you do not have an accepted offer yet so you are very free to look at other offers and accept other offers. You are not under contract on that counter until it has been accepted and delivered to your agent. Back to that delivery word again. Usually, if you are going to accept another offer you retract that counter offer you submitted.
The counter-offer stage can go on for several days and trips back and forth as you continue with the meeting of the mind’s process. Once you have an accepted offer you are ready to start the next stage. Seeing thru the financing contingency and the home inspection contingency.
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Thank you for reading and if you have questions Please feel free to reach out to us. Contact Me!