You have worked hard to sell your property as For Sale By Owner and have an offer in hand…now what? It is important to understand how the negotiating process works and how to protect yourself and your assets (especially when selling your home For Sale By Owner). Here are tips to navigate your way through to signatures on the dotted line.
- Reply in writing.
Take time to review the offer you have in hand and always reply in writing. Whereas mere handshakes worked in days past, having everything spelled out in writing is the only way to avoid misunderstandings and legal headaches further down the road. You have a number of options after receiving the offer. You can accept the offer as is, make a counteroffer or reject the offer outright. If the buyer is not being represented by a Realtor, ensure they are using legal binding contracts. You can find real estate contracts on FSBOmarketplace.com’s Real Estate Forms page. - Learn the buyer’s financial situation.
While considering your offer, you will want to learn about the buyer’s financial situation. If the buyer is obtaining financing, you will want to get a pre-approval letter from his lender, confirming the buyer’s ability to purchase your property. If the buyer is putting down a substantial down payment or paying cash, you will want to verify his funds with a bank statement or other written documentation. - Making a counteroffer.
Often a buyer’s initial offer is considerably lower than the asking price. Let’s face it, the buyers is trying to get the best possible deal for himself and if it is a buyers’ market, he probably won’t make his best offer. Don’t be insulted or take the offer personally, but review the terms of the offer and by all means make a counteroffer. It is always a good idea to make some concession to the buyer in your counteroffer rather than coming back at full price. You want to make him feel like he has gotten ‘something’ and want to continue negotiating. - There is more to consider than price.
Price is important, but there is more to consider when reviewing an offer. What contingencies is the buyer asking for? Is the sale contingent on the sale of the buyer’s current home? Is a home inspection required? Is there any ‘give’ to the closing date? Does the buyer’s desired closing date work with your schedule? If the buyer offers you full price, but doesn’t want to close until 3 months after you have to be at a new job in another city, full price may not look so attractive. Take all terms and conditions into consideration before responding to the offer, especially if you know the buyer will ask for repairs after the property inspection. - Legal contract review.
Once all parties sign a contract, it is a legal, enforceable document. It is a good idea to include a ‘document review period’ into your contract, giving you time to have an attorney review the contract and making sure you understand all of its provisions.
We hope this information will help reduce your stress. To find a home inspector or real estate lawyer, visit FSBOmarketplace.com’s Real Estate Service Providers page.
Tags: Closing, Seller Negotiations
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