You’ve received an offer on your house. Great! Now what? You might feel so excited that you jump at the first offer you see, but there are some smart reasons to be thoughtful before accepting an offer.
- What to consider when selling your home
- How to approach a counter-offer
- Negotiating a house offer or multiple offers
- Accepting an offer on your house (and the steps that come after)
What should I do when I receive an offer on my house?
If you’ve hired a REALTOR® to represent you during the home sale process, they will receive all offers on your home from agents representing the hopeful buyer(s). Once an offer is made, your Realtor will present you with the information from the buyer’s agent. The offer details typically include:
- A purchase agreement. This will become the binding sales contract if the offer is accepted.
- Proposed terms of the deal, like purchase price and whether the deal is contingent on a mortgage approval (vs. an all-cash offer).
- Proposed closing date.
- The amount for earnest money deposit, which is monetary collateral the buyer puts down to show they’re serious about the purchase.
- Provisions regarding title and inspections.
- Contingencies, including the home inspection or sale of the buyer’s home.
Together with your agent, you’ll review the details of the offer to determine if the terms are acceptable. From this point, you can either accept, negotiate or decline the offer.
How long do home sellers have to consider an offer?
In Minnesota, there is no standard deadline to respond to an offer – and it’s pretty uncommon for a buyer to stipulate one. In Wisconsin, on the other hand, buyers are required to put a deadline on the offer. If the offer expires without a response from the seller, the buyer is free to walk away and make offers on other properties.
Should a seller ever accept the first offer?
Accepting the first offer can be advantageous for some sellers. Here are a few reasons why you may accept the first offer on your for-sale home:
- The monetary offer and terms are acceptable to you, or beyond what you were expecting.
- The buyer has proposed a timeline that works well for you.
- The buyer has waived contingencies, making for a smoother path to the closing table.
- The buyer has an all-cash offer and will not have to finance the purchase.
- You don’t want to deal with additional showings or open houses.
- You don’t think you’ll get a better offer from anyone else.
Keep in mind that you could drive yourself crazy wondering if you left money on the table by accepting an early or first offer. It’s important to talk with your Realtor early on about your ultimate goals for selling before you list the home. That way, when the right offer comes in – either after one day or one month – you will be ready to confidently accept it.
When can I decline an offer?
Before rejecting an offer outright, be sure to discuss the decision with your Realtor. If you feel as though a buyer will never compromise to meet in the middle, it may be time to reject an offer.
However, it’s very important to keep in mind that if you reject an offer, your reasoning must be based on the terms of the purchase agreement. You cannot, under any circumstances, discriminate against buyers based on race, religion, ethnic group or other factors not related to the terms of the purchase agreement.
What is a counter-offer and how do I make one?
If you receive an offer on your home that isn’t quite aligned with your goals, you may make a counteroffer. In a counter-offer, you are implying that you will accept the buyer’s offer, subject to one or more requested changes.
Respond with a counter-offer
A common tactic for sellers is to respond to a low bid with a counteroffer for the original list price. This shows potential buyers that the list price is what the seller intends to get for the property and that it wasn’t a high-ball posting. A seller may also find other terms of the offer unacceptable and could make a counteroffer to remove those terms.
If the buyer agrees to your price or terms and signs the counteroffer, you’ve got a deal! Contrarily, the buyer could also submit their own counteroffer in response to yours, and the negotiation process would continue.
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Leverage an expert’s advice
Navigating offers and counter-offers is a high-stakes game, and the process can be stressful and confusing as a result. Remember, your Realtor has deep market expertise and a history of negotiating the best deal for their clients, and you can lean on them heavily during this time – and rest assured that you’ll walk away with the best possible offer.
What if I receive multiple offers?
It’s possible that you’ll receive multiple offers on your home. In fact, some home sellers actually try to attract multiple offers with the hopes of being able to choose the best bid for the final property sale.
When facing multiple offers, you’re at a clear advantage – so sit back and determine the best purchase price and terms for you. Here are a few ways to react when you receive multiple offers:
- Review all bids and choose one. Go through all offers on the home, keeping in mind that you may want to look at more than just the price. To find the best bid, you’ll also want to consider the all-around terms of the offer. You may find that one standout offer is too good to resist and decide to accept it.
- Ask for a final offer. If the bids are close together, or you believe you can negotiate an even better price or terms, you can request for some or all buyers to submit their best and final offers.
- Counter-offer. Rather than asking buyers for their best offer, you could also submit a counter-offer to a buyer who is close to your desired price or closing time, but not quite there.
Whether you find a winning bid after the first set of offers or have to negotiate to get the offer you’ve been waiting for, you’ll find that your Realtor will be an invaluable asset during this process.
What do experts do to negotiate a better selling price?
The easiest way to negotiate as a seller is to make a counteroffer in response to single or multiple offers, then simply wait to see if the counter is accepted. But risk-takers may prefer to go the route of asking for blind “best” offer – after all, an eager buyer may go even beyond the sale price or terms you had in mind.
Remember, though, there is more to a home sale than just price. By thinking about considerations that go beyond the ticket price, you may end up with a sale that really works in your favor. For example, you may prefer to:
- Request no contingencies from your buyer.
- Ask for a faster, or slower, timeline to closing – depending on your preferred moving schedule.
- Choose a buyer who agrees to pay all their own closing costs.
- Put an expiration date on your counter-offer so you get a fast, final answer from buyers.
Do sellers ever reject offers for the asking price of a home?
Price is just one element of a contract, so it’s certainly possible for a seller to view a list-price offer and still reject it based on other conditions stated within the offer.
When the market (or market segment such as a certain price point) favors sellers, you may hear about multiple offers driving prices up so that sellers receive even more than their original asking price. In a market that favors sellers, some may hope to earn more than their listing price at closing – and as a result, they may be inclined to reject their initial listing price from a buyer.
We recommend pricing your home so that you’d be pleased with a list price offer and view anything above it as a bonus. That way, you don’t set yourself up for disappointment, and you don’t irk buyers who are working in good faith to get approved for list-price offers.
What are the steps after accepting an offer?
Now, it’s on to the closing table. Your agent will help you complete the steps to closing on your home, which include:
- Monitoring the buyer’s loan approval and title process
- Negotiating any issues that arise prior to closing
- Selecting a closing date
- Finalizing any payments or negotiations you’ve made to the buyer, including any agreements you made to pay for home repairs or closing cost incentives
You’ll also want to begin packing up your home because moving day will come faster than you realize!