Receiving an Offer on a Minneapolis Home
Sooner or later a potential Buyer will choose your home and make an offer. This is a big step for both sides and may lead to a successful sale. However, there are a lot of considerations that must be resolved before it’s a done deal. It’s a big transaction involving a lot of money, legal documents and your peace of mind. Therefore, it’s worthwhile to understand what’s in an offer and how you’ll know if it’s a good one.
What's included in an offer?
There’s a lot more to an offer than price alone. Things to look for include:
Price. Price is the dollar amount that the Buyer is willing to pay for your home. The net proceeds, or what you will actually get for your home at closing will be impacted by other costs associated with the sale.
Fees and costs. There are a variety of fees, commissions and taxes that will be associated with the transaction. Determining who pays for what is negotiable. Normally, the Seller pays the commissions for the Agents. Some closing costs are normally paid by the Buyer – but in some cases may be paid by the Seller. These fees and costs can be substantial and successfully negotiating who pays for what will be important to the bottom line. Your Agent will advise you in this area to obtain the best overall deal.
Inspections, repairs and warranties. The purchase agreement will usually provide for a period of time for the Buyer to have an inspection performed. If there are defects or problems with the property, it will be necessary to specify who is responsible for repairs. The Seller may choose to either make repairs or sell “as is”. Warranties can be purchased that provide limited coverage for things such as furnaces and appliances. All of these items are negotiable.
Earnest money. When an offer is made, it will include a check as a down payment, or earnest money. If the offer is accepted, this earnest money will be held in escrow and will provide some protection for the Seller. If the Buyer breaks the contract and doesn’t purchase the home, this money may go to the Seller. The more earnest money, the better it is for the Seller. It means that the Buyer is serious and intends to complete the purchase.
Personal property. Anything in the property that is attached to the property is normally considered part of the purchase. For example, cabinets and attached light fixtures are in this category. Anything not attached, such as appliances, are not automatically included. It’s important to clarify, in writing on the purchase agreement, exactly what is and is not included in the sale.
Contingencies. Contingencies are events that must take place for the sale to occur. Some contingencies, such as inspections and financing, are generally accepted if structured properly, while other contingencies such as the sale of the Buyers home can be deal breakers. As a Seller, the less contingencies the better.
Closing date. The closing date can be critically important to reaching an agreement. Depending on the circumstances, finding a mutually acceptable closing date can be difficult. Like other items, it’s negotiable and your Agent will be able to assist with information and options.
How do I choose an offer?
Usually, you will receive a single offer for your consideration. In some cases, especially in a very hot market or with a unique or unusually desirable property, multiple offers can occur. When there are multiple potential Buyers lined up at the same time to make offers, your Agent will need to orchestrate and coordinate the process. It’s good news for the Seller, but does require some special knowledge and direction. There are established guidelines and practices that will be followed to treat everyone fairly and get the best price for the Seller.
When a single offer is received, there are a limited number of responses – accept the offer, reject the offer or make a counter offer. Since there are a number of factors in the offer that may require some negotiation, a counter offer is usually required. Keep in mind that if your counter offer is accepted, you will have a legally binding contract. It’s important to review the offer carefully and cover all details in a counter offer. Your Agent will work with you to understand all of the terms and conditions and prepare a counter offer – taking into account market conditions and your goals and objectives.