Offer and Negotiation

Explanation of Offer

When you receive an offer on your home, your agent should explain all of the main points to you, to include: the buyer’s offer including any closing costs or fees they are requesting. Is the buyer requesting items to be included in the sale of the home? Is the buyer pre-approved? What is the buyer’s down payment on the home? When would they like to close on your home?

Counter Offers/Negotiations

Counter offers are generated by a seller after a buyer has submitted an offer to purchase. Typically, counteroffers will state that the seller has accepted the buyer’s offer subject to certain conditions. A counteroffer is actually a rejection of the original offer and the creation of a new offer. Your agent should guide you on potential responses and make suggestions based on your situation, market value etc.

Acceptance

Congratulations! You found a buyer and have come to terms that are agreeable by both parties. Once terms have been agreed to the original offer is revised to reflect the new terms. The buyer signs off on the changes and then the seller signs off on all. The listing agent should prepare a closing cost estimate and go over this with the seller. This will give an approximate indication of what the seller’s estimated net will be at closing.

Option Period

The option period is an important & usual part of any offer. This is a period of time in which the buyer has the unrestricted right to terminate the contract for any reason. A typical time period is ten (10) days, but it can be whatever is agreed to between buyer & seller. This period of time gives the buyer the chance to hire an inspector, review inspection reports, and negotiate any repair issues that are of concern. The buyer & seller typically will negotiate repairs and come to an agreement during the option period. If the terms of the repairs are not agreeable, the buyer can terminate, or if needed and both parties agree, this period of time can be extended to allow more time to come to an agreement.