If you are selling your home, it stands to reason that at some point you will receive an offer on your home and will need to evaluate the strength of that offer so you can respond to the buyer with an acceptance, reject or counter based on relevant data from the most recent sales statistics. Knowing how to evaluate an offer and doing it the same every time you receive one (if you don’t come to terms with the first offer or receive multiple offers at the same time) is something that shouldn’t be taken for granted. It takes lots of understanding so you can evaluate logically and come to an informed decision.
The same can be said if you are the one writing the offer. It takes time (both yours and your real estate agents) to submit an offer on a home so if you are taking the time to make an offer, you will want to make your offer worthy of the home you are interested in. In some cases, another offer might come in at the same time as yours and you may not get a second chance to adjust your offer to make it shine so you will need to ensure your initial offer shows the seller how much you want their home.
Here are the items you will consider as part of the offer to purchase.
- Financing-Will there be a mortgage on the property or will the buyer pay cash? If there is a mortgage, are they pre-approved, pre-qualified or nothing at all?
- Earnest Money Deposit-How much is it and when will it be made?
- Conditions-Is there another home that must be sold prior to this transaction closing?
- Inspections-Will inspections be completed or is the home being purchased as is?
- Appraisal-Does the home have to appraise, or will the purchase happen regardless?
- What Else-Many other terms may be included as part of an offer. Requests for closing costs, home warranties, personal property to remain with the property…buyers can ask for all kinds of things and they all come with a cost attached.
Now that you know what you will have to evaluate, how do you decide? That is a lot of different pieces to evaluate. Think of it this way, your friend’s birthday is coming up and you want to bake a cake to celebrate. You invite your friend to dinner and the night before, it is time to bake. You only have one chance to get this right. Are you going to make a four-tiered confection with a different cake flavor and filling for each tier covered with a decadent ganache that you have never made before? Probably not. Select something that you are confident will turn out perfectly, something you have baked before, doesn’t require nine different recipes and will still be delicious when shared with a good friend.
An offer on a home is no different. Are you comfortable going with the unknown that will need to pass through six different obstacles before you arrive at the finish line or do you want the more likely to close offer with cash, a large initial earnest money deposit and closing in 30 days?
It is really easy to get caught up in the moment when you are negotiating an offer to purchase. Maybe you were offended by the initial offer from the buyer and can’t evaluate honestly even though they came up to your list price during negotiations. Will your offer to purchase stand out from the crowd and garner the attention it deserves so you get the house you want, or will you be disappointed by the rejection you receive because you didn’t accurately portray your interest in the home through the terms of the offer? An old-fashioned list of pros and cons may help you decide what you should do while setting your emotions aside. Rely on your trusted real estate advisor to guide you through the decision so you can ask questions and get the answers you need. I will be happy to answer any questions you may have regarding selling your home, help you to find your dream home or determine the value of your existing property
Nancy Davidson is your ultimate real estate resource for Mammoth Lakes, CA and The Eastern Sierra. Visit my website for detailed information regarding today’s real estate markets.
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