What To Do With Your First Offer

This is part 4 of a series of 6 articles that guide homeowners through the home selling process. These articles provide insight and suggestions to help homeowners sell their homes.

 

Receiving your first offer or offers is an exciting moment. It’s the moment you know you’re actually going to sell your home, for better or worse. An offer may be near your asking price or it may be much lower but regardless of its value don’t reject your first offer and definitely don’t be offended by it. If a buyer low balled you, take it into consideration. If they offered your asking price, that’s great. Don’t accept it right away. Every offer has an expiration date, usually 1-2 weeks from submission, but that doesn’t mean you should rush. Once you accept an offer, you are obligated to enter closing with that buyer even if a better offer comes along. If you receive multiple offers, you are in control of your home’s fate. In this article, learn what to do with your first offer and why you might want to accept this first one.

 

If the first bid is a lowball offer.

Don’t be offended by it. Buyers are trying to get the best deal possible on a house and the initially low offer is their way of testing your receptiveness to negotiations. Carefully review the offer and all its parts. Does it come with a preapproval letter? Are there any contingencies or concessions? Maybe the offer is low but they offer to pay all the closing costs as well as for the home and pest inspection. Have your First Team agent help you decide if the offer is a good one as a whole.

If the only issue is the amount, you are not without options. Have your agent submit a counter offer that is closer to the amount you are hoping for. There may be multiple counter offers exchanging hands and you will quickly learn if the buyer is financially willing and able to purchase your home.

If in the end you decide you would rather wait for an offer you are more comfortable with, keep in mind that time on the market decreases the value of your home. If you are in a seller’s market, you probably don’t have much to worry about–another offer will most likely be presented.

However, if you find that you are able to negotiate the buyer up to an offer you are pleased with, it’s time to accept the offer.

If the first bid is exactly what you’re looking for.

Don’t accept it right away. Carefully review the offer. Again, check for a preapproval letter and for any contingencies or concessions. You have an opportunity here to negotiate concessions. Maybe you want the buyer to absorb the closing costs or push back the desired move in date. Have your agent feel out how committed the buyer is to purchasing. Real estate is a people business and you want to make sure that the person you are working with toward closing will be a helpful participant throughout–not someone who is going to be a roadblock. If after you review the offer with your agent you decide you are happy with it, it’s time to accept the offer.

If you receive multiple first bids.

Multiple offers are best case scenario. If your home is properly priced, they will most likely consist of everything from low ball offers to above your asking price. Review each offer. Maybe the highest bidder doesn’t have a preapproval letter and is asking you to cover closing costs and include your washer/dryer. You and your agent should sit down together and go over each offer and what it means for you. Keep narrowing it down until there is one you either want to accept or counter offer. If you find one of these offers to be satisfactory, it’s time to accept the offer.

 

Maybe you ultimately won’t accept this first offer but entering negotiations not only gives you practice negotiating and dealing with buyers but it also makes your home more appealing to the rest of the market. Buyers hesitating on submitting an offer on your home will be encouraged by their agents to submit now. Your home appears to be a limited time offer. And, maybe it is if you approve of your first bidder. The next and final step before entering closing is accepting the offer and having your First Team agent draft a purchase agreement.