What to Expect When Evaluating Offers
Selling your home is one of the biggest financial transactions of your life and it isn’t a simple process. It involves large sums of money and strict legal requirements with the potential for costly mistakes, but with knowledge and advice you can safely navigate the process. While many people are familiar with the steps involved in preparing their home for sale, many are often less experienced when it comes to reviewing offers from potential buyers.
Familiarizing yourself with the types of offers you may receive and your options for responding to them will prepare you to respond effectively when the times comes to negotiate the selling price and terms of your home.
There are two types of offers you may receive:
Conditional offers are “subject to” certain stipulations being met before the contract between the seller and the buyer becomes legally binding. Common conditions may include the successful completion of a home inspection, the review of minutes and paperwork from condominium stratas, sale of the buyers’ house or other conditions such as repairs.
Carefully review any seller-binding stipulations in the contract and pay special attention to escape clauses that allow the buyer to cancel the deal and walk away. If there are subjects related to financing written into the contract, make sure that you determine the buyer’s ability to pay. A lender qualification letter will reveal if the buyer has the funds to make monthly mortgage payments.
When you receive a firm or “subject free” offer, it means that the buyer is prepared and legally obligated to purchase your home outright without any conditions, as long as you sign and return the contract before the offer expiry deadline. A firm offer shows that the buyer is 100% serious about buying your home.
Whether you have received a conditional or firm offer, you have three choices in how to respond:
Accept the Offer
Your signature finalizes the contract and it becomes legally binding legal. Make sure you understand and agree to all of the terms in the document before you sign. If you are in doubt, have your lawyer review an offer before you sign your acceptance.
You may make changes to the offer, such as adjustments to the price, closing date or conditions. When you do so, the prospective buyer may accept, reject or make another counter offer in response. Only when one of the parties signs an unconditional acceptance of the other party’s offer does it become legally binding.
Reject the Offer
You may simply reject the offer and the sale will not go through.
Evaluating and negotiating offers and counter offers can be one of the most stressful aspects of selling a home. An experienced real estate agent can help you navigate the process and evaluate your options so that you can sell your home at its ideal market price within the time frame you need.
What has your experience been in negotiating offers? Share your comments with us.
Pssst… this Sun Peaks chalet is on the market and ready for you.