The Offers

Remember this is a business deal.  The buyer is offering you a price and specific terms he wants in exchange for you taking your home off the market.  No matter what market conditions dictate, most buyers believe that sellers put their homes on the market for a price higher than they expect to receive. And most sellers believe that buyers expect to pay more than what they first offer.

When an offer comes in, you can accept it, reject it, or make a counteroffer. You are most likely to accept the first version of an offer if it's one of many you received in a bidding war but even in the hottest markets all homes do not fetch more than the asking price or get caught up in bidding wars.  More likely you will make a counteroffer attempting to get more money for your home and perhaps changing some of the terms.  The counteroffer allows you to budge just enough to let the buyer know you want to keep the offers coming while preserving wiggle room for later give and take.  

Negotiating a home sale is a little like playing cards. Both sides are advised to play their hands cautiously, revealing to the other players only what’s necessary. If you’re the seller, that means you will not know exactly how much the buyer can afford to bid for your home. If you’re the buyer, you will not know exactly how low the seller can go and still stay in the game. Remember that a successful negotiation process of offers and counteroffers will leave both the seller and buyer feeling good.  Each party will make a concession to receive something in return.

In a seller’s market, especially one with very few listings in a price range of interest to numerous buyers, it is not uncommon to receive multiple offers or to have a bidding war break out. That means there are buyers literally trying to outbid each other to buy your home. When more than one buyer is interested in the same property at one time, everyone wins. The buyer who pays more than the other buyers feels like they got the property from someone else, and the seller feels like they won because they will receive the best offer. Creating a bidding war puts the seller in a position with all the advantages to receive the absolute most for their home.

In reviewing offers, the offer with the highest price may not always be the best offer to accept.  Offers will contain many other contingencies that need to be considered such as the: review of results from a professional inspection, finding affordable financing and insurance, passage of specified option period providing unlimited right to cancel, selling of buyer's current property, or approval of all repairs the seller has agreed to make. An offer with a lower price that has no, or few, contingencies might be better than a full price offer with a web of strings attached.

When you and a buyer both agree on the contract terms and sign and date a purchase offer, you are legally bound to proceed to with the sale. Your house isn't sold yet, but it is off the market and now is at the "pending sale" stage. You still can accept "backup offers" in case your buyer doesn't get a loan or the inspector finds a problem and the buyer backs out. However, you are obligated to pursue the deal with the first buyer.