7. Offers, Negotiating, and Contract to Close
Offers, Negotiating and Contract to Close
You have to sell your house three times: first to the buyer, then to their inspector, and finally, to the appraiser and lender. Here's what you need to know to get the best possible price, terms, and conditions for your property, and then under contract and closed.
All About Offers
An offer is more than just the price that the buyer says they’ll pay. There are many elements for a seller to consider, and a potential buyer must submit a complete package with all the details specified in the contract.
- Offer price
- Earnest money amount
- Closing date
- Tax proration
- If there is a home to sell
- Contingency dates
- Special requests
- Signed disclosures
How the buyer will pay for the house is critical for the seller to know before responding to the offer. A serious offer has either a pre-approval with verification of credit, assets, and income or, if cash, a solid proof-of-funds from a reputable financial institution.
Try to avoid being swayed by emotional or personal appeals from a buyer. While a "buyer love letter" is sometimes submitted with on offer, doing so is generally discouraged in our area due to the possibility of violating fair housing regulations.
Before you accept an offer, you should understand the contingencies that protect both buyers and sellers with "contract escape routes." Learn More Here
Negotiating the Best Deal
Most people don't enjoy negotiating, but you can rely on us to expertly and faithfully do so on your behalf. We always operate under your instructions and never share confidential information. We don't do single-agent dual agency (representing the buyer and the seller in the same transaction) because doing so could compromise the interests of our client.
Don’t take a low-ball offer personally or get insulted. Some buyers think if they start with a low offer, they can always come up in price. We've successfully sold many homes for happy sellers who were initially confronted with a silly first offer.
Buyer Inspection Contingency
As defined in the multi-board purchase agreement we use here in northern Illinois, the primary purpose of the buyer’s home inspection is to check for material defects in the home’s major systems. A material defect is a significant problem with a system or a major component of the house. Learn More Here
Sometimes a home inspector will recommend that the buyer schedule specialty inspections for concerns that are beyond a general inspection. Examples of this would be for questions about the roof or electrical systems that are beyond the scope of a general inspection. If the buyer asks for time to do additional inspections, their attorney will ask to extend the review period.
You can agree or decline to address any inspection requests. If an inspection reveals a material defect and you decide not to address it, it must be disclosed to future buyers if the deal falls apart. Most sellers agree to at least a few repairs because it’s usually better to keep the buyer you have than to relist and find a new one.
Most inspectors will note everything from scuffs on walls to gutters that need cleaning. But this doesn't mean that you must fix everything written up in the inspection.
If the appraised value is lower than the contract price, then the buyer can:
- Put more money down to make up the shortfall.
- Ask you to adjust the purchase price.
- Cancel the purchase without penalty.
Before the closing, you and your attorney will gather the information and documents needed for the sale to be finalized, like your loan payoff letter, the property survey, HOA documents, and copies of receipts for seller-paid inspections and repairs.
You must be completely moved out of the house, leaving a reasonable amount of time for the buyer to do their final walk-through. Most buyers and their agents prefer to do the walk-through during daylight houses.
The buyer and their agent will do a quick tour of the house to make sure it’s in good condition and verify the completion of repair requests.
Most sellers pre-sign the paperwork with their attorney so that they don’t have to attend the closing. When the buyer's loan is funded, and the paperwork is complete, the buyer will get the keys to their new home. If you don't attend the closing, the title company or your attorney will wire you the proceeds or send you a check, as well as the final set of documents for your files.
Congratulations, you've sold your house!