Step 5.  Handling offers and negotiations

Finally, after all your hard work staging your home and having the hoards traipse through your lovely home, your agent calls to tell you that someone has made an offer to purchase it. Your automatic response will be "how much are they offering?" What you really need to ask is "is it a good offer?"

Be prepared for some legitimate and some low ball offers. In a seller's market where inventory is low, you will probably get close to, or above listing price. In a buyers' market where homes are on the market for extended periods of time you're going to get some low ball offers and hopefully some more realistic offers.

The price the buyer is offering might be what you are asking for but down below in the paper work the buyers might be looking for all sorts of extra goodies. You should review the WHOLE offer thoroughly to see if it is really a good deal. Do not fixate on the price only.

As the seller, you have three options open to you when a buyer submits an offer
1. Accept as is
2. Ignore the offer
3. Counteroffer

Please note that your realtor is legally obliged to pass ALL offers on to you no matter how bad or how insulting they may be. This also includes any offer that come in after you have agreed to a sale.

The offer process: the purchase and sale agreement
Offers from buyers are presented in the form of a Purchase and Sale Agreement (PSA). This is a four-page legal document, the main elements of which are:

• Identification of the parties in the transaction, plus a legal description of the home.
• The offer price and method of payment. Also includes what earnest money is included.
• State the type of deed and the condition of the title
• Any contingency clauses
• State the date of transfer of possession and title to the property

The buyer will fill out the PSA form with the help of their agent. The agent will then fax the document to the listing agent who then present the offer to the seller. The offer must be in writing. Verbal agreements are not legal for real estate transactions in the state of Washington.

The initial offer from the buyer will have a deadline within which time the seller can respond to the offer. Once that period has elapsed, and no action has been taken by the seller, the offer is considered no longer valid. Any earnest money would be returned to the buyer.

Assuming the price the buyer is offering to pay is in the range you are willing to accept, your next step will be to review the other elements of the sale agreement.

Please click here for information on the following related subjects:

Contingency clauses.
Qualifying the buyer: the bank does, you should too!


Please click here to read about the following related subjects:

Counter-offers.
Inspections.
Acceptance of the offer.


Continue to Seller's step 6.  Closing and Escrow


Return to Seller's step 4.  It's showtime