Once an offer has been tendered, normally negotiations begin between the buyer and seller. Sometimes an offer is accepted with no counteroffers, but this is the exception, not the rule.
Negotiation is a complex matter and all transactions are unique. Both sides – you and the seller – want to feel that the outcome favors them, or at least represents a fair balance of interests. My job as a buyer agent is to represent you in the negotiations and make sure your best interests are served.
Time Sensitive Transactions
When we submit an offer to purchase a property, I will include a “respond by” date to the seller. Everything in a real estate transaction is time sensitive, so communications and responsiveness is key to a successful outcome. If a counteroffer is made, it will often have a very quick turn-around time. It is important that you be available to make quick decisions and respond promptly to any counteroffers. We typically work these offers using secure electronic signature technology so that you can easily and securely sign them from your computer.
Once I receive a counteroffer from the seller or their agent, I will review that offer with you and you can decide if it is agreeable. When a seller makes a counteroffer, you are no longer bound by your initial offer. You can either accept the sellers counteroffer, decline the counteroffer, or make your own counteroffer back to the seller. If you decline the offer, your earnest money is then returned to you. This process continues until either both parties come to an agreement or one party declines to accept the other’s counteroffer. Most offers and counteroffers have expiration dates. A party does not have to specifically reject an offer or counter-offer. They can just allow the time to expire and the offer is no longer valid. Either party can rescind an offer or counter-offer if the other party has not accepted the offer in writing, with no penalty to either party and all earnest money returned to the buyer.
Knowing the local real estate market is crucial to your strategy for negotiating your offer. You must know the underlying market. If you are in a seller’s market you will need to act quickly and be willing to offer at the top of the range. This is especially true if the home is in a hot area and has great appeal. If the seller has multiple offers, you must make your very best offer up front.
In a buyer’s market you may be offering on a house that has been for sale for several months. Or the house may have a small buyer pool due to floor plan layout, poor condition or updating needs. Here you have a lot more leverage than you would with a new listing. Knowing the seller’s needs will help you improve your leverage. They may want to move immediately, or prefer a long close time, If you can meet their secondary needs you have some leverage for a better price.
I negotiate home purchases every week so am quite comfortable doing so and can help you during this stressful time. I will give you an honest assessment of the situation and let you know how much leverage I feel you have with the buyer, and guide you through an offer that best fits your needs.
Withdrawing an Offer
Can you take an offer back? In most cases the answer is yes, right up until the moment your offer is accepted. In most cases, you can withdraw an offer before you’ve been notified of its acceptance.
Writing the Contract
Once an offer or counter-offer has been agreed to and accepted by all parties, this offer or counter-offer becomes the purchase contract. In most cases Realtors use a standard contract prepared by the Oklahoma Real Estate Commission to make the offer or counteroffer, but both parties can agree to have a contract written up by an attorney if they prefer. This is expensive so for most residential home sales, buyers and sellers choose to use the standard OREC contract.
Once the contract has been finalized, copies will be made for all parties, including your mortgage company. Distribution of the contract is what gets the ball rolling on financing, inspections and the other aspects of closing the transaction.
Good Faith Estimate
Each time you submit an offer on a home, I will provide you an estimate on your closing costs and monthly payment. This estimate is based on the price you offer, the terms, and costs of closing and the interest rate you can expect. While this estimate is generally quite close, it is still just an estimate.
Once you have an accepted contract, your lender will provide you with a much more detailed and likely more accurate Good Faith Estimate. This is required by federal law and is based on the same factors as above, but since the lender has much more detailed information on your financial situation and has the details of the actual contract in hand, they are able to provide a closer estimate than I can.
Ways to Improve your Leverage
- Loan pre-approval
- Minimize contingencies
- Have a backup home you are willing to make offer on
- Be flexible with closing date
- Pay your own closing costs
- Understand current market