Most people believe that if a home is for sale, and you offer on it… the next step is going under contract… naturally.
Not necessarily. There are other scenarios that can cause crimps in this simple plan.
- The multiple offer situation
- In a sellers market, or other competitive market, we will often see multiple offers presented. It’s extremely important to make sure that the agents are communicating to ensure that all parties are presented in their best light. There are many factors to consider when accepting an offer and you should assume that the seller is being coached correctly by their agent, in order to accept the strongest offer. No one wants their deal to fall apart, because often times, that seller is counting on the buyer of their home, in order to ensure they get their next purchase done without issue.
Things that a seller may consider….
- Price, concessions, close dates… etc. Those are the simple, straight forward, ‘meat’ of the offer.
- Who is the cross agent? Lets be honest, we’ve all met that salesman that just rubs us wrong, and has maybe even ‘conned’ us at another point in time. Their reputation will carry on. If an agent is known for ‘looky-loo’ contracts that constantly cancel the first week… A wise agent will let the sellers know that this offer has risks.
- Who is the lender? This is why a buyer should always use a reputable lender. When reviewing multiple offers, having a strong lender, known for getting deals done early or on time without fail… someone who is known for reviewing their docs before underwriting, or someone who is known for having a great in-house appraisal team, will have an edge and make your offer that much stronger than others.
- Who is the buyer? There are situations where writing a letter to the seller, can put even a lower offer, in the lead. A general rule of thumb is, someone that loves their home, wants to see someone buy it to be loved. It’s not always the case, but it doesn’t hurt to try. Sellers also want to be reassured that inspections will go well. This doesn’t mean you are required to move on with a house that’s falling apart, but it helps if you present your standing on repairs. For example, if you know the house needs some work, you can present that in your letter. You know the home will have a honey-do list, and you’re ok with taking on reasonable repairs. This can make a HUGE difference in your offer if the seller doesn’t think they will be up against a combative buyer who thinks they’re buying a new home, and will ask for everything on the inspection to be fixed and/or brought ‘up to code’.
- Rejected offers (counter offer)
- Sellers do have the right to reject any offer they want. Sometimes we get a reason why, and we can adjust our offer accordingly. This is known as a counter offer.
I bet you thought a counter was going to be in it’s own list item, didn’t you? But the fact is, a counter offer is a rejection of your offer the way it’s written. Maybe the seller did not like your terms, ie. Close, price etc. However a seller may also want to keep a precious heirloom chandelier, or clarify that they will not be repairing that hole in the wall. Whatever it is, a seller can counter your offer to be more appealing, or simply reject it (or not respond at all, which is the same as rejecting it), for any reason what so ever.
- Sellers do have the right to reject any offer they want. Sometimes we get a reason why, and we can adjust our offer accordingly. This is known as a counter offer.