Offer on Your Home—What to do with it?

So, you have decided to put your home on the market? You have decluttered, staged, had gorgeous photos taken and shown the house to buyers. When you get an offer on your home, you should consider a few things before accepting.

How Do You Know if it’s a Good Offer?

Ask yourself what are your expectations for the offer?

The first thing you need to do is consult your mortgage broker to know your numbers and think of a strategy. Ask if there is anything else you need to pay and your mortgage status. Also, ask how much equity you will need to purchase your next house. 

Your realtor will help you understand the market. Ask the realtor to pull stats from the market about other homes sold in your area. If you just listed your home, this might not be helpful, but it will be eye-opening a few weeks or months down the line. 

The third thing to note is the difference between terms and conditions. A term is something that will happen by the possession date. A condition is something that needs to happen to make a firm sale.

A term is an agreement by everyone on work that will be done to the home by the seller in the future before the buyer moves in. The terms can vary from fixing a specific part of the home to something that needs to be cleaned up by a particular date. These terms must be completed by a professional with documentation.

A condition could be about financing. One example of a condition is that the bank approves the amount of money to the buyer. Even if pre-approval has occurred, the bank needs to finalize all the finances before a home sale can go through.

How Long Does an Offer Take to Be Accepted on a Home?

The timeline depends on how busy the market is during the time of the offer. It could take hours to finalize, up to a few days.

If you are in a seller’s market, the offer might be only left open for a few hours. Buyers tend to do that if they want the offer accepted quickly and ensure they won’t lose the house.

Another situation in a seller’s market is a buyer writing an offer where they want the seller to sell right away—so they write up appealing terms and conditions, with a reasonable price, to purchase the home quickly and easily.

The flip side is a buyer’s market. The seller could be left open for days if the seller gets an offer. This tactic leaves open negotiations to figure things out back and forth.

In this buyer’s market, it’s easier to negotiate back and forth to get the best price, deal, terms and conditions, etc., for both parties.

How Do You Respond to an Offer?

There are a few ways to respond to an offer. You can counter the offer, reject it or counter offer.

After receiving an offer, take your time to think about all the possible options. If the price isn’t right or the possession date isn’t quite right, you can choose to negotiate and make a counteroffer. The buyer will review the offer and have the choice to counteroffer back, reject or accept the offer.

Make sure you get everything in writing, as nothing is a solid deal in real estate unless it’s in writing. The documents become legally binding when both parties have signed the documents.

Can a Buyer Back Out of an Offer that is Already Accepted?

The answer is both yes, and no. It depends if the conditions that have already been implemented. 

If the home sale has become firm and there are no conditions, they can no longer back out of the deal. If the buyer needs to back out of a deal, they could lose their deposit and even have a lawsuit. 

If the buyer has conditions, such as their bank or insurance not approving their financing, they can back out without repercussions. The other time it’s possible for the buyer to back out is if the home inspection comes back, and the repair is too much of an expense, and in line with the outline of conditions, they are entitled to refund their deposit.

Can Another Offer Come in on a Home that Already Has an Offer on it?

Yes, it is possible to have multiple offers on a home and keep one as a backup offer in case the primary bid falls through. 

As a seller, if the first offer’s conditions can’t be met or the offer does not come together by a specific date, the second offer will be considered active. Your real estate agent and the lawyer can offer advice and help you navigate through the conditions and execute them properly.

I hope this write-up gives you more insight into what to do when you get an offer on your home. There is no easy answer on what to do with the offer except use the experts around you to navigate the situation.

Consult your local REALTOR® for more information and guidance on offers and selling your home!