>> Friday, July 24, 2009
The goal of every seller is to have a line of buyers outside the front door, each clutching higher and higher offers. And while this has been known to happen, in most markets there is some balance between the number of buyers and sellers.
How do you negotiate?
Real estate bargaining typically involves compromises by both sides. It's not war; it's not winner-takes-all; and it's not the time to take personally any comments made by purchasers.
Instead, negotiating should be seen as a natural business process; buyers should be treated with respect; and owners should never lose sight of either their best interests or their baseline transaction requirements.
Should I accept an offer?
A number of factors determine whether a buyer's offer is acceptable. They include:
- Is the offer at or near the asking price?
- Has the buyer asked you to pay for any additional costs—buyer’s closing costs, for example?
- What is the alternative to the buyer's offer? If a home has not attracted an offer in months, then you need to determine if a better deal is possible—recognizing that each month costs are being incurred for mortgage payments, taxes and insurance.
- Do you have enough time to wait for other offers?
- What if no other offers are received?
- What if several offers are received? Do you choose the high offer from the purchaser with questionable finances who may not be able to close, or a somewhat lesser offer from a buyer with preapproved financing?
In each case, sellers—with assistance from their Realtor—will need to carefully review offers, consider marketplace options and then determine whether an offer is acceptable to meet your goals.
What is a counter-offer?
A counter-offer is simply a new offer. Once an offer is received, the seller now has three options: accept the offer, decline the offer or make a fresh counter-offer.
Offers and counter-offers reflect the back-and-forth activity of the marketplace. It's an efficient and practical process—but also one that may contain tricky clauses and hidden costs. Your Realtor can explain the local bargaining process in detail and assist in the actual negotiations.
Finally, once both seller and buyer are in agreement, you are officially on the road to the closing table!