Receiving An Offer
If you are selling your home, receiving an offer can be an exciting time. However, the process is not as simple as just reviewing the purchase price. There are several other elements to consider. Factors, such as the earnest money deposit, seller concessions, contingencies, and closing date play a major role in the decision-making process.
- Earnest Money Deposit (EMD) – The buyer places the EMD with the realtor in a trust account to express good faith to purchase. The higher the EMD, then the more serious the buyer is about purchasing the property. Sellers should decide whether the EMD is a sufficient amount to accept or whether to negotiate a higher amount.
- Seller Concessions – Seller Concessions are incentives that home sellers give to buyers, such as paying closing fees. Homeowners should take into consideration the requested concessions to ensure contributions are not deducting from the desired seller net amount.
- Contingencies – In most cases, buyers will include at least one contingency that makes the offer conditional on factors, such as if the buyer can sell their home first, if they can obtain a mortgage, property appraisal, or an inspection. The contingency is simply to protect the buyer if for some reason or another they are not able to purchase the property. Home sellers should pay close attention to determine if the contingency is reasonable. For example, if the buyer requests to purchase the property conditional on if his or her grandmother likes it or not, is not a valid contingency to consider. Also, ensure that each contingency has a time-frame and deadline when the condition will be met.
- Closing Date – Another important aspect to consider when reviewing an offer is the closing date. Make sure the closing date is within a reasonable time-frame. You would not want to keep your home off the market for an extended period of time just in case the sale does not consummate.
When the time comes to review an offer on your property, you will be excited. You will want to quickly look at the purchase price and then make a decision. But keep in mind that there are many other factors to consider than just the purchase price. Communicate closely with your real estate professional for advice and detailed instructions on how to proceed when receiving an offer to purchase your home.