3 Things to Consider Before Accepting an Offer on Your Home
There are several items to keep in mind when it comes to accepting an offer on your home. Unfortunately, at the end of the day, most folks only care about the dollar amount. However, as a real estate agent, it’s my job to help you weigh all factors prior to accepting an offer. The highest offer is not always the best offer! Depending on your situation, there may be several other factors you need to take into consideration first! Before you decide whether or not you want to accept an offer, although the sales price is important, here are a few additional items I recommend you mull over:
1. What is the buyer’s timeline and does that timeline work for you?
Once you sell your house, you’ll be moving to your next house! Whether you’re buying another home, moving into an apartment, moving in with family/friends, or moving into assisted or independent living, it’s important the timeline that’s being asked of you will work with your timeline. If a buyer is needing a quick turnaround but you’re not able to move to your next place until 1.5 months from now, you need to take this into consideration!
On average, from the day your house goes under contract to the day you close, you’ll be looking at roughly 30-40 days. This is not always feasible! Especially if a cash offer is involved. These are often quick turnarounds!
2. Is the buyer able/willing to pay for their own closing costs?
Let’s say the buyer made a full price offer of $220,000 but they were also needing $5,000 in closing costs. This is actually like an offer of $215,000 to you! It’s important to pay close attention to how much the buyer is putting down as a downpayment (VA loans are an exception to this) and whether or not they’re going to need you, the seller, to help them out with their closing costs.
Depending on what type of market you’re in, you may receive multiple offers on your house! Your real estate agent should be explaining to you exactly what the buyer is or is not asking of you. In some cases, a buyer can sweeten their deal by offering to pay for your seller’s title policy or the survey! If the sales price is $220,000 and the buyer is willing to pay for your title policy, that puts an extra $2,220 back into your pocket.
3. How much Earnest Money did they put down? What about the termination Option Fee?
Earnest Money is extremely important when it comes to a real estate transaction. This amount is how much skin the buyer has in the game! Typically, a buyer is looking at having to put down at least 1% of the sales price in Earnest Money. If the buyer is unable or unwilling to put down 1% in Earnest Money, it’s likely they don’t have a lot of money to work with. This is extremely risky and could cause problems down the road. It could even kill a deal!
In East Texas, it’s common to see a $100 option fee. This is the amount you get to keep in the event the buyer terminates during the option period.
Again, if you’re in a multiple offer situation and if the buyer has additional funds to work with, they can put down more than 1% as well as a larger amount for the option fee in order to prove they are serious! The more skin in the game a buyer has, the higher their risk of losing money and the less likely they are to walk away!
If you’re looking at selling your house, make sure you’re working with a professional who knows how to help you navigate the various terms of an offer. The highest offer is not necessarily going to be the best offer! A house will still have to appraise for the sales price if it’s an FHA, VA loan, or conventional loan if a buyer is set on only buying the house if it appraises for the agreed upon sales price. Hire a realtor with integrity who is willing to make less money if that means doing what is in YOUR best interest as a seller!
Kristin Koonce Burroughs, REALTOR®
(903)241-2608
kristinkoonce@gmail.com
BOLD Real Estate Group
