What to Know Before Accepting or Rejecting an Offer on Your Home
Receiving an offer is an exciting milestone when you’re selling your home. After preparing your property, listing it and welcoming potential buyers, you finally have someone interested in making it theirs.
But before you focus on the number at the top of the offer, take some time to understand everything that comes with it.
The highest-priced offer may seem like the obvious choice, but price is only one part of the decision. Financing, contingencies, timing and other terms can all affect how likely an offer is to make it to the closing table.
Here are some of the factors to consider with your REALTOR® before you accept, reject or counter an offer.
Look Beyond the Purchase Price
Of course, the amount a buyer is willing to pay matters. But two offers at the same price can look very different once you dig into the details.
For example, one buyer might offer more money but include several contingencies or request a closing timeline that doesn’t work for you. Another might offer slightly less while providing terms that better fit your priorities.
Your REALTOR® can help you compare the complete offer and understand how each term could affect your sale.
Consider the Buyer’s Financing
How a buyer plans to pay for the home is another important part of the offer.
If the buyer is financing the purchase, their offer should provide information about their loan. Your REALTOR® can help you understand what documentation has been provided and how the financing terms could affect the transaction.
You may also receive an all-cash offer. Because there is no mortgage approval involved, a cash offer can remove some financing-related steps and contingencies from the transaction. That may make the offer attractive to some sellers, although you should still evaluate its price and other terms before deciding.
Review the Earnest Money
Earnest money is money a buyer provides as part of the transaction to demonstrate their commitment to the purchase. It is generally applied toward the buyer’s costs at closing if the sale moves forward.
The amount of earnest money and the circumstances under which it may be returned to the buyer or retained can depend on the contract. Your REALTOR® can walk you through what the earnest money terms mean within each offer you receive.
Understand the Contingencies
Contingencies are conditions that must be satisfied for the sale to move forward. They can also provide a buyer with circumstances in which they may be able to terminate the contract.
Common contingencies can relate to the home inspection, appraisal, financing, title or the sale of the buyer’s current home.
That doesn’t mean an offer with contingencies is necessarily a bad offer. Many are a normal part of a real estate transaction. Instead, consider what each contingency requires, the deadlines attached to it and how it could affect your plans.
Make Sure the Timing Works for You
Pay close attention to the buyer’s proposed closing date.
Your ideal timeline will depend on what comes next for you. Maybe you’ve already purchased another home and want to close quickly. Or perhaps you need more time to find your next property, coordinate a move or complete another part of your transition.
Closing timelines can vary based on the financing and terms of the transaction, so consider whether the buyer’s proposed schedule works with your own.
Look at What the Buyer Is Asking For
The purchase price tells you what the buyer is offering to pay. It doesn’t necessarily tell you what you’ll walk away with.
Review the offer for any additional requests that could affect the transaction. Depending on the offer, a buyer may ask the seller to provide credits, address certain costs or agree to other terms.
Your REALTOR® can help you understand how those requests affect the overall value of an offer and compare your options more clearly.
Remember That You Can Counter
Accepting or rejecting aren’t always your only choices.
If an offer is close to what you want but one or more terms don’t work for you, you may decide to make a counteroffer. You could negotiate the purchase price, closing date, contingencies or other terms depending on the situation.
A counteroffer also changes the negotiation, so talk with your REALTOR® about the potential advantages and risks before deciding how to respond. Market conditions, buyer interest in your property and your own priorities can all play a role.
Decide What Matters Most to You
Before offers start arriving, think about your priorities for the sale.
If your biggest goal is maximizing the sale price, you might evaluate offers differently than a seller who needs to close by a particular date. If you’re balancing the sale with the purchase of another home, certainty and timing may carry more weight.
Knowing your priorities in advance can make it easier to evaluate an offer based on your actual goals rather than reacting to the purchase price alone.
Talk Through the Full Offer With Your REALTOR®
An offer includes a lot of information, and each term can affect what happens between signing the contract and reaching the closing table.
Your REALTOR® can help you compare the financial terms, understand the conditions included in the offer and think through how each option fits your plans. With that information in hand, you can make an informed decision about whether to accept, reject or negotiate.
