You’ve Got An Offer!!

Potted plants on hardwood floor by open door in houseWhether it is on day 35 or day 2, that moment when you finally get an offer is a pretty exciting one. There is someone out there that likes your house and has decided it is the one that they want to make their own. Now comes the negotiating. I know that for many seller’s this part can be stressful, but as an agent, I love it. This where we sit down and go over the offer that has been submitted and make some decisions. Depending on the market and the level of activity and motivation of the buyers in the market, you will see all kinds of offers. Some buyers have watched those home flipping shows on tv and think that they are supposed to give you an offer at 20% below market value to get things started and some buyers have already been out in the market, have offered on other properties and lost them to other buyers and are motivated and willing to offer whatever you are asking to get the house. Often you will see some variation in between. Either way, understand, that as a seller, you are not obligated to take any offer. Some people think that once you go on the market, you have to accept the offers that come in, but that is simply not the case. Now, since you went through all of the work to get to this point, you are likely motivated to sell and willing to accept a reasonable offer, so now we work on finding out if we have that or if not, are the buyers willing and able to come up to that? Negotiation is always about finding a place where everyone on both sides are happy and feel good about what they are getting. We want the buyers to feel like we are willing to work with them as long as they are willing to work with us. We also need to know at this point what your parameters are in various areas. Things like, how quickly are you able and willing to move? Are you willing to include any of the appliances in the sale? Are you willing to pay any or all of the buyers closing costs? Are you willing to pay for a home warranty? Are you comfortable with the amount of earnest money they are putting down and the kind of financing they are doing? And last, but usually most important, are you happy with the amount of money they are offering to pay for your house? Are we close to where you want or need to be? Are we comfortable with our ability to get an appraisal at this price? These are all questions that we will discuss and decide on before you decide what to do with the offer that you have. When you receive an offer, you can respond one of 3 ways: one, if you are happy with all the details of the offer, you can simply accept it. Two, if there are some details that you need to adjust before you can feel comfortable moving forward, your agent can draft what is called a counter offer addendum and you can stipulate those items there and submit that counter offer to the buyers (now it is back in their court) and three, you can simply reject the offer. That is really only done if they are so far off of where you want to be and have expressed their disinterest in negotiating. Most of the time you will either accept it or counter it. Keep in mind that once you counter an offer, you cannot enter into any other offer or counter offer with any other buyers until you receive a response. Otherwise you run the risk of being in a situation where you might be selling your house twice. Typically you are going to deal with one offer at a time, unless of course you receive multiple offers at once, in which case, you can opt to deal with them one at a time or you can notify all the buyers that there are multiple offers, allow them some time to come back with their highest and best offer if they choose to and then evaluate all the offers together at that point and pick the best one. I have done this many times and while it is courteous to notify all the buyers and allow them the time, some buyers and buyers agents don’t like being in multiple offer situations and will walk away. Other agents will get upset if you don’t notify them and give them the chance to change their offer. Ultimately you just need to decide what feels right to you and direct your agent to handle it that way. You are the seller, it is your house and it is your call.

Once you have negotiated and come to terms with a buyer and have an accepted offer in place, now you get to wait. Really from that point forward your only responsibility is to make the house available to the buyer for inspections and appraisals and keep the house in the same condition that it was when they decided to buy it. You may get some requests from the buyer after the inspection if items come up that need to be repaired etc. You are not legally obligated to comply with their requests. All homes sold in Utah are now sold As-Is, meaning that the seller no longer has to warranty anything in the home at all. A buyer is advised to get an inspection and has the right to make requests if there are things that pop up that they are uncomfortable with, but you have the right to say no to that request. Although I will say that by doing that you also run the risk of losing your buyer so it is always advisable to be reasonable, consider the items that most concern them and work with them as much as you can. When working with my buyers I always advise that they only make requests of the seller if those items are deal killers for them if they didn’t get addressed, so when representing the sellers, I will have that discussion with the buyer’s agent as well.

Occasionally an appraiser will come back with what is called “appraisal required repairs” on the appraisal. In this situation, you are required to complete these repairs if you want to sell to this buyer. Appraisal required repairs are those that if they are not completed, the lender will not lend the money to buy the house and the buyer will not be able to buy. You do have the option of saying no, but you will lose the buyer and have to start all over in finding a new one. You will also very likely find the same issues with any subsequent buyer as well since appraisal required repairs often stay with the home or will surface with any new appraisals that are done.

Once you have made it past the inspection and appraisal and have resolved any issues if needed, you are within days of closing and handing over keys. Hopefully you have started packing and are ready to move on to your new adventure. On the big day you will sit down with your title company and sign the documents to sell your home and transfer title over to the new owner once their funds are transferred to your title company and all outstanding debts are paid. A good title company will have already done title searches to make sure that there are no leins or judgments or anything strange attached to your property and they will ensure that all mortgages, 2nd mortgages, HOA fees and outstanding city utilities are paid at closing and that anything left over comes back to you. You will get a chance to review estimated settlement statements prior to closing and if you have a good agent, they will have already provided you with estimated versions right after going under contract and the numbers will already be fairly similar. Either way, you’ve just successfully sold your home!