What happens when a buyer makes an offer?
One common first impulse is to ask "How much are they offering?" While price is an important factor, it's also important to sit back and look at the big picture when negotiating a sale. Consider:
1. Buyer's financial situation
2. Financing method
- Is the buyer qualified?
- What is the buyer's annual income and employment history?
- How much down payment and closing cost cash is available and what is the source?
- What type of financial debt does the buyer have? Car loans? Credit cards?
3. Your costs
- Is the loan type and interest rate realistic for current economic conditions?
- Is the length of time requested to obtain a loan realistic? 30-45 days is a typical time frame. It allows enough time to process papers, but also allows you to put the home back on the market promptly if things fall through.
4. Your calendar
- How much does the buyer want you to contribute toward closing costs?
- What will your net proceeds be? Add up any points, taxes or fix-up expenses requested and deduct them from the contract price to determine if your final profit is what you need to make your move.
- Does the buyer's proposed settlement date give you enough time to select your next home and obtain financing?
- If you can't move to your next home promptly at settlement, can you rent back from the buyer?
- Must the buyer sell a home before buying yours? You may not have the time to wait while the buyer sells.
- What add-ons does the buyer want? Curtains, lawn equipment, swing sets? All of this can affect your final net proceeds, be used as bargaining chips, or both.
We are here to help. We've been through this countless times and can help you cut to the chase and come up with a mutually acceptable contract. A call or e-mail today can make a big difference in the future.