Accepting An Offer

The Price Isn't Always Right. The higher the price, the better the offer, right? Not necessarily. The price is only one element of an offer to buy your home. While it is indeed an extremely important element and every seller wants to receive an offer reflecting the full value (or more) of his home, there are other contractual terms included in the offer that may impact the overall attractiveness of the offer and the likelihood it will actually make it to settlement. The proposed settlement date, the financial strength of the buyer, the nature and number of contingencies included in the offer, the required renovations or improvements to the home, and other terms and conditions can make a seemingly good offer appear less attractive. If you've moved on and your home is vacant and awaiting a buyer, a full price offer with a proposed settlement date 6 months later means that your full-price offer is actually reduced by an amount equal to 6 more months of mortgage payments that you will have to make. Time does equal money in real estate. A buyer that offers you full price or more, but has no way of closing the deal is not a worthwhile offer - you will take your home off the market and lose valuable marketing time only to have the deal collapse when the buyer is unable to fund the purchase. You should evaluate the totality of the offer, not only the price offered. In a multiple offer situation, you want to choose the buyer who, along with offering a good price, is also able to demonstrate his ability to purchase your home (e.g., having a pre-approval from a direct lender (not a broker) and providing a financial information sheet to show he has the income and savings on hand to cover the unfinanced costs associated with the purchase), his reasonableness in requesting certain repairs or improvements (e.g., asking that you repair the leaky pipe, but not that you re-paint the entire house inside and out), and his seriousness about completing the transaction (e.g., providing a sizeable earnest-money deposit and proposing a reasonable settlement date). As your agent, I will assist you by thoroughly and objectively evaluating all offers that you receive on your home to help you select the offer that offers the best combination of price and other terms to meet your goals.

Contract Ratification. Once you have selected the offer you will accept, with the assistance of your agent and the buyer's agent, the parties will ratify the contract for the purchase and sale of the home. This means that you and the buyer have agreed on all terms related to the purchase and sale of the home and all of those terms are reflected in a written contract. Remember, oral agreements related to real estate don't count - it must be in writing to be enforceable. So, be sure to document each agreement and have that agreement initialed or signed by all parties. The agents for the buyer and the seller will work together and with their respective clients to establish a schedule of events that are necessary to complete between ratification and settlement and will help to complete each of those steps. These steps may include home inspections, appraisals, termite and other pest inspections, completing all financing requirements, etc. In order to ensure everything proceeds smoothly toward settlement, it is important to fully understand all of the steps necessary to get from contract ratification to settlement, to set a schedule, and to stick to that schedule. Aside from ensuring a smooth transaction, a failure to meet a particular obligation may result in the deal falling apart, a buyer losing a earnest-money deposit or, the worst case scenario, a lawsuit. As your agent, I will keep you constantly updated on what you will need to complete prior to settlement as well as the progress of the buyer to ensure that you are always aware of the status of the transaction and any potential issues. Should issues arise, I will be there to help you resolve them.

Always keep in mind that if you accept an offer from a buyer and the contract is ratified, you are now in a legally binding contract with only limited avenues available to cancel the contract without risk or obligation. So, it is very important to be fully aware of your rights and obligations under any contract that you sign. Read all of the documents comprising the contract and if you have questions or concerns, raise them. Seek legal counsel from a qualified attorney if you desire it or feel that you need it.

Ready To Go? Don't pack your bags just yet. So, you have a signed contract. Time to start packing up, right? Not necessarily. There are still hurdles to final settlement and much can happen to undermine your deal. It is best not to start the packing and moving process until all hurdles to settlement are truly cleared, since you may have to very quickly put your home back on the market and it won't show at its best if it is in disarray or filled with packed boxes. There's a proper time to start preparations for moving -- as your agent, I'll be sure to help you determine when its safe to start packing.

© Nadia Nejaime, 2006