Here's an offer! Now what?

Should you be excited? Scared? Offended?

Well, probably none of the above.  It's time to take off the homeowner hat that you've worn for the last however many years you've owned your home and it's time to put on your BUINSESS hat. 

That's the hat that will allow you to analyze what exactly this offer that is being presented to you says. 

As you analyze the offer based on it's merits, it's not ALWAYS price that is the bottom line on an offer...sometimes TERMS play a big part in the offer too.

Consider this:  Two offers come in on the same day. 

OFFER ONE  is a full price offer with the buyer putting 3.5% down as their out of pocket downpayment.

OFFER TWO is $10,000 under list price and is a cash offer. 

Which one would you take?  Or would you want to know a little bit more about these offers before taking one?  If PRICE was all that mattered, you'd take OFFER ONE, but since price ISN'T all that matters, let's look at terms.

OFFER ONE: Closing date is set three months from today and has a contingency for the sale of their current home (meaning they have to sell in order to buy your home but they are going to have you tie your home up off the market while they sell theirs).  In addition, their home ISN'T LISTED yet and to make it even more interesting, they need 3% seller contribution to closing costs and while they do have a preapproval letter, it's not signed by the loan officer and how that approval was arrived at isn't exactly stated (did they pull credit, verify assets, consider their other home in the scenario etc).

OFFER TWO: Came in with a closing date of two weeks with an option to lease your home back to you for 1 week so that you can move more effectively.  They have provided a bank statement which sufficiently covers the price they are paying for your home and the funds are in a money market account and liquid.  They are not getting a loan so the only thing they have asked for you to provide is a home warranty, roughly $400.

Now that you know all the terms, which offer is more attractive?

Here's what happens when the offer comes in  though...you have THREE CHOICES:

1. ACCEPT THE OFFER--sign it just the way it came in and be on your way towards inspections and closings.

2. REJECT THE OFFER--Tell the presenter that their offer is rejected...you can give a reason or not, but the end result is that you are rejecting the offer.

3. You can COUNTER the offer--throw the offer back on the buyer's table with some additional stipulations. 

Generally, it's been my experience that REJECTING an offer is just not a good idea...even if the price and terms are terrible, to just outright reject it can generally KILL any further communications.  It's generally a good idea, if the offer isn't all that you need or want it to be, to COUNTER the offer with some additional terrms.

You might want to move the closing date up or back; You might offer less on closing cost assistance or give the buyer the option to add closing costs to the price (provided you can sustain that amount on an appraisal). 

Regardless of which offer you like...it's a good idea to be well informed to know that not only are you looking at PRICE on an offer but also TERMS.   It's also a good idea to be BUSINESS MINDED" and not immediatly reject an offer because it's low...sometimes it's just the starting point to a very fruitful negotiation!