Yeah! You have an offer on your house!! Congratulations, you’re almost there.
In today’s blog we’re going to give you some tools that will help you to know what you should watch out for and some helpful strategies for reacting to, and reviewing, the offer.
All of us, including REALTORS®, tend to jump to the purchase price first, it’s the natural knee jerk reaction to receiving an offer. So, assuming that is or was your first step, you need to step back and read the entire document (we know, it’s tedious, but do it!) then go over it in detail with your REALTOR®. The goal here is to know and fully understand what the buyer is offering. Here is what you’re looking for:
- Purchase Price -okay you did that, we get it, was it above, at, or below list price? If it’s above list price, you’re likely in a seller’s market and may well be considering more than one offer! If it’s at list price, it means your home was priced right or again, you’re in a hot seller’s market. If it is below list price you may feel disappointed. What ever your situation, you will not understand the true nature of the offer until you read the whole thing.
- Earnest Money – you’ll recall from our previous blogs that the earnest money is an indicator of the buyer’s commitment to purchasing your home. It represents the money the buyer will forfeit to you if they back out of the deal once all contingencies are removed.
- Type of financing – if the buyer is borrowing money to buy your home, is there a mortgage approval letter included with the offer? What type of loan is it (Conventional, government insured, jumbo)? If it’s a cash offer, has proof of funds been included?
- Close of Escrow and Possession date– does the close of escrow match the possession date and your time frame for moving out and handing over possession?
- Fixtures and personal property that convey with the sale – review these sections carefully so that you’re clear on what the buyer is asking you to leave behind when you go AND what they want you to take or get rid of.
- Warranties – Make sure you understand the promises you’re making to the buyer and the promises the buyer is making to you.
- Inspection Period – Understand that, in Arizona, the buyer has the right to inspect your home using as many inspectors as the buyer chooses and it’s your responsibility to accommodate those inspectors.
- What additional provisions has the buyer asked for, who is responsible for paying for the appraisal, homeowner association fees and costs including disclosure, and assessments, what about the home warranty?
- Response time – make sure you don’t miss the deadline for getting back to the buyer, sometimes the deadline is very short.
Now that you have the full picture here are some things we want you to keep in mind:
- We get that you love your home and that there is a lot of emotion in it for you, however, you do yourself no favors if you allow emotion to control your decisions. Selling your home, despite the history you have, and your emotional attachment, is a business transaction. It’s about what your home is worth on the market today without regard to what you paid for it, how much you love it or how much you have invested in it.
- You’re in control of the process and have choices. Your choices boil down to these:
- Accept the offer as is, after which you will proceed to the inspection phase;
- Reject the offer and you’ll be in the same position you were in before your received it; or
- Counter the offer.
Our goal with this blog is to get you to look at the entire offer, not just the sale price. Re-visit your seller’s net sheet (if you missed our Seller’s Net Sheet Blog” click here to learn how to prepare your own) and adjust it in accordance with the offer. Or have your REALTOR®, lender, or title company re-do your net sheet for you. Which ever way you go, it is important that you know all the numbers and how they impact your bottom line.
Then, based on ALL the information, you have, make an informed decision on how you want to proceed.
That’s it for today’s post, if you want more information on things to consider when you receive an offer, or if you want to stay up to date on all things Anthem, make sure you like our Facebook Page at ‘Wise Move AZ’ or subscribe to our Wise Move AZ channel on YouTube.
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Remember, if you or anyone you know is looking to buy or sell their home, please give us a call! It’s always the right time to make a wise move with the Wise Move AZ Team.