03 May How to Respond to an Offer to Buy Your Home
You put your home on the market and then boom, the moment of truth arrives in the form of a buyer offer.
Receiving your first offer when selling your home in Illinois is always exciting. However, it can also easily become stressful if things are not 100% to your liking or you receive multiple offers. The good news is, the offer process usually involves some negotiating, made much easier with a realtor and real estate attorney on your side.
Here are the basics in responding to an offer to buy your home so you know what to expect.
Offers and Counteroffers
An offer is the first action presented from a prospective buyer. The offer comes as a “Contract to Purchase” which lays out the terms and conditions as well as the price. While it is tempting to just focus on the price, the other terms and conditions can often make or break a sale. If necessary, you can counteroffer, which may lead to negotiations during the process.
Offers and Earnest Money
When an offer is submitted, the prospective buyer must also provide what is called “earnest money.” Earnest money is simply a deposit given to your realtor or real estate attorney to show you the buyer is in “earnest” or serious with their offer.
Rejecting or Accepting an Offer
As the seller, you have a right to reject the offer based on a number of factors. Enter your realtor and real estate attorney who will review every detail of the terms and conditions. It’s not uncommon today for buyers to offer more money or even above your asking price in this “hot” sellers’ market.
With the help of your realtor and real estate attorney, you can choose to reject the offer outright or present a counteroffer with amendments to the buyers’ initial offer. The buyer can then accept your counteroffer, or choose to negotiate with a further counteroffer. This can go back and forth several times or end abruptly when you or the buyer decides the terms are not agreeable.
Sellers also have the option to consider the offer up until a specified offer date, at which time the offer expires if you do not respond.
The key items for the seller to consider when reviewing an offer from the buyer include:
- Closing date
- Size of the down payment
- Earnest money deposit amount
- Type of Financing and financing contingencies
- Closing cost credit
- Appraisal contingency
This becomes even more important in multiple offer situations. Comparing each offer based on these details is necessary to identify the best offer, and consider which offers to reject outright. You also have the right to put a few offers aside, choose to counteroffer what you feel has the most potential, and then decide if you wish to make other counter offers to other buyers.
Once you accept an offer, you enter the attorney review period during which time both you or the buyer can terminate the contract without penalty. Hopefully, you come to an agreement and proceed to closing!
Real estate transactions are significant and complex, as we’ve written, but with the counsel of a real estate attorney, you’ll know the best path forward!.