You’re finally there. You are selling your house. You’ve staged, you’ve prepped, you’ve listed your house. Now you have an offer. What should you do, or not do, when responding to an offer when selling your house? Here
When a buyer makes an offer, it is customary for the buyer or their agent to acknowledge receipt. From there, your obligations are pretty limited, provided that all fair housing requirements are met. For example, you don’t have to accept an offer of you consider it unreasonable, but you can’t turn down an offer based on race, gender, or other protected classes.
While specific vary by state, you basically have four options when you receive an offer.
- Accept It – Probably the easiest option. If it’s a good offer and fair, you can accept the offer and move forward with the sale. Congratulations. There are usually still a few hurdles like inspections, financing and the like but you are on your way to selling that house.
- Counteroffer -In the category of close but not quite, you can identify what concerns you about the offer and you can offer an alternative to the buyer, throwing the ball back in their court. This could theoretically go back and forth until you settle on a deal you are both happy with.
- Turn It Down – If the offer isn’t even close then you can just say no outright. A common scenario here would be a ”low-ball” offer where a buyer is just looking to see if you’ll bite.
- Ignore It – Probably not the best strategy for continuing discussions, but you could just ignore the offer outright.
As you consider your options and how you want to respond, here are a few pointers to consider.
Strategies For Responding to an Offer on Your House
Don’t Get Emotional
This one cuts both ways. You want the buyer to be emotional. As the home seller, you need to avoid being emotional. Don’t read anything into the offer. Simply evaluate the offer against what you think your house is worth, what you can sell it for and what you need to sell it for. Don’t let a low offer insult you. That doesn’t mean you shouldn’t turn it down. Just don’t let yourself get upset and react emotionally.
It’s not just about low offers. Don’t let yourself get too excited about a high offer. Don’t focus just on the numbers. Also focus on any contingencies and on the buyer’s ability to close. A high offer is great but not if it never happens, or even if it takes too long to happen. Each offer has its own hidden costs. Try go figure out the costs for your offers that you receive.
What Position is the Buyer In?
You likely won’t have a lot of information about your buyer. Use as many clues as you can to understand their situation. If they have a mortgage contingency and a home sale contingency in their offer, then you know that they both need to sell their current house and get approved for a mortgage before they can close. In other words, it’s going to take a while. That could be fine or could be a deal-killer depending on your circumstances.
Your realtor can be an invaluable resource in these situations. They are talking to the other realtor or maybe even the buyer. These discussions and questions and concerns raised can give you a lot of insight into what the buyer wants or needs. This can help you decide whether to accept the offer, to consider other offers more seriously or if you should counter the offer.
Consider Relations With the Buyer
This may sound like it works against the point about not being emotional but if the buyer is difficult to deal with during the offer stage, how will they be when you are trying to get money from them? This isn’t emotional, it’s simply practical and no amount of negotiations going to fix it. A buyer who is difficult when they want something from you (an accepted offer) is going to be even more difficult later on.
When you are considering an offer from such a person, consider their offer carefully. There is something to be said for someone who enters a negotiation with respect and consideration for you. Such a buyer might be worth considering even if it means leaving a few dollars on the table. After all, if you have to fight for those dollars, did you really leave them?
Is there Extra Room in the Offer?
There is no rule saying that you have to accept an offer. At the same time, you don’t have to reject the offer either. You can counter and see if you can get a better offer. Just like with the original offer you may not need to counter with higher dollars. If you don’t think the buyer can of will pay more, maybe you can look for something else. Here are some examples to consider:
- Timeline – You could also close more quickly. Or close later if that is what you need.
- Other Costs – This can be helpful if there offer is going to cost you in other ways like carrying costs such as taxes, a storage unit, moving costs, another mortgage, or anything else where it is now costing you more to sell. Try asking the buyer for help on these costs.
- Contingencies – Try asking for relief from a contingency clause.
Be creative. Others have negotiated storage space on the land free (or discounted rent) in the house of any number of things.
It’s More Than Just the Numbers
When you get an offer. Consider the entire offer. The highest offer isn’t always the best offer. Look at the whole thing. Look at the numbers, certainly. Also look at the conditions of the deal, the buyer, the timeline. Look at the whole thing. Then consider if you should accept the deal, reject the deal of counter for something better.