How To Review And Respond To Homebuyers' Offers

Your marketing efforts start to yield results not long after your put your home on the market and you received your first offer from a buyer. Congratulate yourself for what a great marketing job you have done!
 
Now, how would you respond to buyer’s offer?
 
First of all, you need to understand several key points before you start to review and respond to buyer’s offer:

1). An offer from a buyer means that the buyer is clearly interested in buying your home regardless how far or how closer the offer may be from your expectation. You should take it seriously and respond well. Don’t be offended by the offer that is too low.
 
2) Your emotion and attachment should be completely separated from the financial aspect. This is one of the keys for your success in negotiations. Buyer will not be able to see the same value as you do on your property, nor understand all the memorable times you had or shared in your home and all the celebrations took place there.
 
3) The buyer's goal is totally opposite from yours. Your goal is to make as much profit as possible and buyer’s is to get the best deal possible. An agreement can only be reached if both parties can walk away with satisfactions. Therefore, reasonable comprises from both parties are needed.
 
4) Go back to your initial planning, and look at what selling price you have in mind and reminder yourself what is your bottom line and what is your optimal selling price.
 
With all the important points in mind, now you are ready to review and respond to the buyer’s offer. When you review the offer, there are few important points you should pay specific attentions to.
 
1)      Focusing on your net profit first. Deduct the offering price from the closing costs that the buyer asks you to contribute. Higher selling price doesn’t mean you get a higher net profit if buyer asks you to contribute a higher closing cost. You are not obligate to pay any closing costs for the buyer’s part. But, sometimes doing so it may help the buyer to close the deal.
 
2)      Closing date: How far away is it from what you like to.
 
 
3)      Payments methods: pay in cash or home mortgage loan? If it is paid by home mortgage loan, how much down payment buyer is planning to pay? Higher down payment indicates that buyer has certain amount cash in hands right now. But, sometimes it means that buyer may not have a good credit score or enough income. You should focus on buyer’s capability to pay at closing or the capacity to get a mortgage loan.
 
4)      Terms for inspections and repairs. Sale “as it is” is the best term for you. But, buyer wouldn’t accept it. Inspection with negotiation to repair in certain timeframe is the one acceptable by both parties.
 
5)      Any contingent clauses in the offer.
 
Always consult with your real estate attorney if there is anything you don’t understand.
 
After your objective review, now, you are ready to respond to your buyer. Your first call to buyer is to try to set the stage for your further negotiations. Be ready to have a few rounds of negotiations. In your first call, you should
 
1)      Built rapport: This will help you in negotiation later.
 
2)      Asking questions to qualify if buyer has the capacity to get the mortgage loan so you don’t waste your time if the buyer is not qualified. Ask the buyer to send you a pre-qualified letter. This is the most important step you should take before you tie up with an unqualified buyer.
 
3)      Ask questions rather than you talk. Listen and Let the buyer talk. The one talks most and lose more in any negotiations. So, keep your mouth shot and listen. This is the golden rule for the success in any negotiations.
 
 
4)      Don’t disclose your bottom line on selling price to anyone, including your buddies and relatives.
 
After you first call, you should have enough information to make your first counteroffer. You should expect counteroffers go back and forth for a few times before an agreement is reached. All the offers and counteroffers should be in paper.  But, before you accept any offers in writing, make sure that you understand all the financial ramifications of the transactions. Always consult with your real estate attorney if there is anything you don’t understand.
 
After receiving an offer, you can either choose to accept it, counter back it for negotiation, or reject it. But, when you reject an offer, it should be based on the price and terms, not anything else. You should fully abide the state and federal fair housing law. It is illegal to discriminate against any buyers based on their race, sex, religion, family status, and national origin, etc during the entire process of the home selling, including any and all marketing efforts and selling practices.  Always consult with your real estate attorney if there is anything you don’t understand. Legal consequence will be severe in case of violating the fair housing law.
 
 
Other related home selling tips:
 
1.       Showing your home
http://besthomesellingtips.com/category/home-selling-101/showing-your-home/
 
2.       How to market your home
http://besthomesellingtips.com/2007/08/06/how-to-marketing-your-home-effectively/
 
3.       Hiring an agent
http://besthomesellingtips.com/category/home-selling-101/hiring-an-agent/
 
4.       Staging your home
http://besthomesellingtips.com/category/home-selling-101/home-staging/
 
5.       Fix up
http://besthomesellingtips.com/category/home-selling-101/fix-up/

respond to buyer’s offer

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