Evaluating Offers

Evaluating Offers

Pricing is only one factor to consider when reviewing an offer
on your home. It's important to review the entire offer - with all
of its terms and conditions - when making a decision.

Consider these areas when evalutaing any offers you receive
from interested purchasers.

Price

Obviously, price is a major consideration. How close is the offer
to your asking price? Is the market strong - do you have a
good chance of getting more if you wait?

Contingencies

Virtually all home purchase contracts have some contingencies
- and many of these are extremely reasonable. But it's
important to consider the potential of these conditions to
affect or terminate the transaction. It may be advisable to
accept a lower price with few contingencies over a higher
figure with a large list of conditions.

Prequalified Buyers

Buyers who are pre-approved for mortgage financing are among
the strongest purchasers. Not only do these buyers already
have funding in place - they are also typically among the most
credit-worthy buyers.

Beware the Home Sale Contingency

Offers are sometimes conditioned upon the sale of the buyer's
current home prior to the closing. This is an extremely onerous
condition. You simply trade the risk of selling one home for that
of selling a different one - and you have far less control over
the marketing of the buyer's house.

Seller Financing

Some offers are contingent upon the seller taking back
financing. The exact terms can vary considerably, however it is
usually not advisable to accept this type of deal unless there
are no alternatives. Apart from the fact that most sellers want
to cash out in order to buy a new home, holding a mortgage
can be risky, involving costly legal enforcement actions if the
borrower defaults. With the number of mortgage programs
available from lenders, a buyer who demands financing from the
seller is probably a high-risk borrower.

What Does the Buyer Want You to Do?

Few homes are in perfect condition, yet a buyer may expect to
receive yours in pristine form. A purchaser who expects to buy
a 50-year-old house in flawless condition is unrealistic - and
could turn out to be a difficult buyer. While you should expect
to repair any major problems, beware of a purchaser who seems
excessive in his or her demands.

Handling Multiple Offers

If you are fortunate enough to receive multiple offers, make
sure to review each one carefully. If one party is significantly
stronger than the other(s), or one offer has fewer conditions
you may want to try work with that buyer first. After reviewing
the terms of the offers - and discussing them with your agent -
you can submit a counter-offer to all of the parties.

Counter-Offers and Negotiation

Negotiation is very common in the real estate markets. When
you receive an offer for less than the asking price you have
three choices - accept it, reject it out of hand, or make a
counter-offer.

No matter how
carefully you
research the
market and how
fairly you price
your home,
there's a decent
chance you'll get
at least one offer
that is well below
the market value
of your home.
While many
people get upset
or angry by these
offers, the proper
way to handle
them is
unemotionally.
Simply send a
polite refusal to
the buyer. If the
buyer cannot or
will not come up
to your price level
you've lost
nothing. If he or
she is simply
fishing to see how
low you will go
you haven't lost
any negotiating
ground at all.

Whatever you do,
don't take it
personally. Selling
your home and
moving is
stressful enough -
don't drive
yourself crazy
over a bottom
fisher trying to
get a