For most REALTORS, this is one of the favorite parts of the transaction. We guide our clients through identifying their most favorable terms and conditions with the goal in mind to get the price they like . . . and move WHEN they want to move . . . with all the perks they desire. Of course, we may not get EVERYTHING you want, but you'll be amazed at how well we do.. We invest LOTS of time learning more about negotiating and find that the more we know about “the other side” the better our odds will be to get what you want . . . So a big part of the Negotiation phase of the transaction is a fair amount of investigate work.
When an OFFER comes in, most agents for the buyer will call us to let us know they have an offer. We try to meet them face to face so they can explain the terms and conditions and tell us a little about their clients. We use this opportunity to do as much "prenegotiating" as possible. This means that we will communicate to them your best terms as we know them and will let them know of any special requirements (such as letter of loan approval for the buyer). We will contact you as soon as possible and will set up a time for us to present it to you in person. We prefer to do this face to face so we have clear communication without any chance of misunderstanding.
Some REALTORS do NOT give us notice and will simply email the offer with no other communication. When this happens, we attempt to have a conversation with them prior to discussing the offer with our Sellers. If we are unable to reach the Buyer's agent, we proceed with determining a counter offer without more information.
We will analyze the offer focusing on
We determine what terms best fit your needs. You have three options.
Your real estate consultant's tip when receiving an offer is that there is no such thing as an insulting offer. An offer shows that the buyer has certainly decided that your home meets their requirements that it is worth what they are offering. Every offer is the opening of a conversation between Buyer and Seller through their respective representatives. Often our response to a fresh offer will be a "test" to find out if the Buyer is negotiable.
Our goal in any successful negotiation is to get to bottom of the BUYER'S motivation quickly. We want to know what is MOST important to the buyer. Does the buyer need to move quickly? Does the buyer need help with closing costs? As soon as we know the buyer's true motivation, we can more easily work on our strategy to get closer to what YOU want. With each counter, we will be discussing with you "next steps" and will be consistently letting you know what your options are and how we feel the buyer is likely to respond. We cannot make your decisions for you, but we CAN coach you to make informed decisions.
Terms and Conditions - An offer is a proposal from the buyer to you . . . It is the BUYER's ultimate scenario . . . the best price for the buyer at the optimal closing with the optimal possession date . . . and probably some other terms having to do with financing, inspections, etc. We will study the offer carefully with you to be sure that you do not encounter any unwelcome surprises later in the transaction.
Contingencies are terms in a contract which exist for the protection of the interests of Buyer or Seller. Usually a contingency has a "fuse" meaning it must be "satisfied" or removed within a defined number of days after the contract has been fully accepted by all parties. Removing contingencies in a timely manner is essential because as long as the contingencies exist, the buyer or seller may have the ability to void the contract. Following are brief definitions of types of contingencies we may encounter in any offer.
Loan Contingency will exist in virtually every offer that appears. Most buyers do not have the ability (or would not choose) to pay cash for a house and thus will be procuring financing of some type. This contingency is generally NOT removed prior to closing. The Buyer is almost always protected until closing in case of some catastrophic event that may cause the loan to be declined. Our best defense against this contingency is to require an unconditional letter of commitment from the lender within a certain number of days from contract acceptance. We generally suggest that we require this within 7 business days. This does not remove that contingency, but it does reduce significantly the chances of loan denial at last minute.
Inspection contingency - Most buyers will choose to do an inspection. They can hire a professional inspector or do it themselves. This is generally done within 7-10 days. Often, the buyer will submit an inspection release along with a list of requested repairs. These requested repairs can only be for items in the house that are not functioning properly (not aesthetic items). The Buyer DOES have the right to terminate the contract based on this inspection. We will guide you through this process and can help arrange any repairs required by the buyer.
Contingency on the sale of another property is present when the buyer has a house that must be sold in order for the buyer to qualify for the purchase of your house. This means that if the buyer's house does not sell, the buyer would not be obligated to complete the purchase of your house. We handle this very carefully by being VERY clear about the terms of this contingency. Generally, we recommend a "48 hour first right of refusal" (or "kickout") clause which states: "If the seller (you) receives another acceptable offer, the buyer will have 48 hours to remove the contingency on the sale. If the buyer is not able to remove the contingency, the seller will void this first contract and proceed towards closing with the second acceptable offer." When you accept a contract with a contingency on a sale, we continue to market the property as an available listing.
Miscellaneous Contingencies can come in many shapes and sizes. We will study any offer and pick out any issues of concern and will deal with any unusual contingencies immediately.
Multiple Offer Scenarios - If we think we might get more than one offer simultaneously, we present all offers to you "side-by-side" and help you determine whether you want to work with ONE or request “Highest and Best” offers from all before choosing one. We will advise you to allow us to communicate to all parties that multiple offers exist (without disclosing any of the terms of any of the offers). Once you select one of the offers and negotiate THAT offer to completion, we then go to the other offer(s) and offer them a "back-up" position should the first contract fail. Our goal is to retain ALL prospective buyers until someone has actually closed on your property.
When we reach agreement of all terms, we establish a "Binding Agreement Date" which starts the clock on the "Performance Deadlines" defined in the agreement. Next, Your Vital Few agent will "quarterback" the "Completion" phase.