A buyer submitted an offer to purchase your home. Depending on what the offer contains, you may be excited, disappointed, or maybe a little unsure about whether you should accept it or not.
Here are key things you should consider before accepting an offer on your home:
Buyer’s Qualifications
Buyers should submit a mortgage prequal or proof of funds with their offer to show you they are financially capable of purchasing your home. In fact, per the purchase contract, one of these documents are required to be submitted with their offer.
Timeline
It typically takes about 30-40 days to close on a home. Does the tentative closing date on the offer work for your schedule? Do you need to enter a lease back agreement (post possession) with the buyers to give yourself more time to make moving arrangements? If so, does the buyer have the flexibility to do so? Your timeline must match up with the buyer’s timeline for a smooth closing.
Earnest Money
Earnest money is a deposit made to show a buyer’s good faith to buy a home. There’s not a set amount the earnest deposit must be but as a general rule of thumb, it is typically around 1% of the purchase price. There are several reasons outlined in the purchase contract why a buyer can cancel & receive their earnest money back, however, if the buyer backs out due to a change of heart, you (as the seller) will get to keep the earnest money.
Contingencies
Appraisal & inspection contingencies are two of the most common contingencies you’ll find in a real estate contract. Buyer contingencies are riskier to sellers, as there’s no guarantee the buyer’s home will sell or that you will successfully make it to closing. If you are considering accepting an offer with high-risk contingencies, be sure the offer is strong in other areas (financing, earnest money, timeline, settlement date, etc).
Price
You shouldn’t JUST focus on the sales price when deciding which offer to accept, but the offer price on a contract is still an important factor to look at. Consider how long your home has been on the market, the condition of your home, the current real estate market, & how many offers you’ve received before deciding what you consider to be a fair sale price.
Looking to sell your home in the next 3-6 months? Let’s discuss your needs. Call me!
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