Multiple offers are the norm these days, so it's crucial to have a plan for reviewing offers - so you don't allow the best to slip through your fingers.
Here’s a game plan for evaluating the offers which come in on your property:
1) Understand the process
All offers are negotiable, as your agent will tell you. (Don't have one? Contact me!) When you receive an offer, you can: a) accept it, b) reject it, or c) respond by asking that terms be modified, which is called making a counter offer.
2) Set your non-negotiables
Decide in advance what terms are most important to you. For instance, if price is most important, you may need to be flexible on your closing date.
3) Create an offer review process
If you think your home will receive multiple offers, work with your agent to establish a time-frame during which buyers must submit offers. This gives your agent time to market your home to as many potential buyers as possible, and you time to review all the offers you receive.
4) Don’t take offers personally
This may be easier said than done, because selling your home can be emotional. But, in rational terms, it’s simply a business transaction, and you should treat it that way. If your agent tells you a buyer complained that your kitchen is horribly outdated, justifying a low-ball offer, don’t be offended. Consider it a sign the buyer is interested and understand that those comments are a negotiating tactic. Negotiate in kind.
5) Review every term
Carefully evaluate all the terms of each offer. Price is important, but so are other terms. Is the buyer asking for property or fixtures—such as appliances, furniture, or window treatments—to be included in the sale, and you plan to take with you? Is the amount of earnest money the buyer proposes to deposit toward the down payment sufficient? The lower the earnest money, the less painful it will be for the buyer to forfeit those funds by walking away from the purchase if problems arise. What kind of contingencies does the offer include? Make sure the buyers include a pre-approval letter, which means they’ve already been started the loan process. Is the buyer asking you to make concessions, like covering some closing costs? Are you willing, and can you afford to do that? Does the buyer’s proposed closing date mesh with your timeline?
With each factor, ask yourself: Is this a deal breaker, or can I compromise to achieve my ultimate goal of closing the sale?
6) Be creative!
If you’ve received an unacceptable offer through your agent, ask questions to determine what’s most important to the buyer, and see if you can meet that need. You may learn the buyer has to move quickly. That may allow you to stand firm on price but offer to close quickly. The key to successfully negotiating the sale is to remain flexible.
If you have questions about selling your home or investment property, contact me today via email or at (619) 209-9953.
krista bell, REALTOR®
Thanks to G.M. Filisko for this article