EVALUATING AN OFFER
When you have your home on the market, there are several factors to consider when evaluating a sales offer. Obviously you want a good price, but closing dates and other conditions can be just as important. Here are just some of the factors to consider:
PRICE: It’s important to know how an offer compares to the recent sale price of homes/properties in your area. A list of the recent sales in the area can help establish this, along with considering the competition in the current inventory
TIMING: A closing date that meets your requirements, your needs or want to sell right away, might make the closing date worth more to you than the highest price. Alternately, if you have the leisure of time.. your personal circumstances will determine what’s right for you! Typically the completion date represents the day the title of the property is legally transferred and the transaction of funds finalized unless otherwise stated. In British Columbia, the Possession Date is typically a day after the closing.
WHO PAYS FOR WHAT: An offer that requires the buy to pay for expenses you, as the seller, might normally cover, such as reports, survey’s investigations, inspections, etc. could add up to more dollars in your pocket than an offer with a higher price.
ITEMS INCLUDED IN THE SALE: Most buyers expect you to include everything permanently installed or attached to your property, such as light fixtures or a built-in dishwasher. These might also include appliances and certain fixtures or decorative items, such as window coverings and mirrors.
SIZE OF DEPOSIT: The deposit shows the buyer’s good faith. Typically the deposit is held in trust by the Buyers brokerage until the closing date and will be applied against the purchase price of the home when the sale closes. The amount of the deposit can range drastically, depending on the value of the real estate being sold – a higher deposit may indicate a higher commitment on the part of the buyer. Your REALTOR® can advise you on the suitability of the amount of the deposit being offered.
INSPECTIONS: It is common to have an offer that is conditional upon a home inspection, appraisal, septic investigations, water tests, geo-technical assessments, surveys, etc. It offers reassurance that your home’s/properties structure is sound and that the other systems are function as intended. Homes &/or properties that sell “as is” usually go for a lower price or can take longer to sell than homes that those that have been inspected.
MARKET CONDITIONS: Analyzing current real estate market conditions will help you to understand whether the offered price is acceptable or not. If you are in a rising market and there are not many other houses for buyers to choose from, the fair market value of your home or property can be a little bit higher than similar recent sales. However, if you are in a softer market and there are many properties for sale, your fair market value will likely be lower than similar properties which have sold recently.
When an offer is presented, your REALTOR® will advise and help you obtain the best possible price and terms. Understanding the standard forms and the many transactional issues is a key ingredient to negotiating the best terms to meet your individual needs. It is important that you remain in close contact with your REALTOR® during the negotiation process so that proposed changes can be reviewed and responded to quickly.
YOU HAVE THREE OPTIONS:
- ACCEPT THE OFFER EXACTLY AS IT IS
If you decide that you would like to accept an offer, your REALTOR® will make sure you know the precise meaning of each term in the written offer BEFORE you sign the document.
Once you, the seller, sign a Contract of Purchase and Sale agreeing to its terms, and your acceptance has been communicated to the buyer, it becomes a legally binding contract. Legally binding means both you and the buyer will be bound by the terms of the contract and must perform your respective obligations as stated. Your performance can be enforced in a court of law.
If you are uncertain about any of the clauses contained in the offer, you may wish to consult a lawyer before signing the contract; however, keep the expiry date of the offer in mind if you decided to postpone acceptance.
- MAKE A COUNTER OFFER
If the offer is not acceptable to you, further negotiations may be necessary to reach terms agreeable to both you and the buyer. If you change anything at all in the original offer, you are considered to have rejected that offer and to be making a new offer from you to the buyer. This new offer is usually referred to as a “counter-offer”.
The only risk in making a counter-offer is that if the buyer has changed his or her mind and rejects the counter-offer, you do not have the option to return to the original offer and accept it. But, the buyer may decide to make another counter-offer back to you and the process of counter-offers could continue until an agreement is reached.
- REJECT THE OFFER
You are under no obligation to accept any offer or to make a counter-offer. If, however, you reject an offer which exactly meets all the terms you agreed to in the Listing Contract which you signed with your listing agent, you could be legally obligated to pay the real estate commission.
Your REALTOR® brings invaluable knowledge and expertise to the home-selling experience, and is dedicated to your needs every step of the way.