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Offers & Negotiation
Offers & Negotiation
What price should you accept? How low is too low, and how high is just pie in the sky? How do you make a counteroffer? Here are the basics of diplomacy.

Buyer Motivations PDF Print E-mail
Selling a Home - Offers & Negotiation

Buyers' motivations may play a strong part in the back-and-forth. Some are in a hurry because they are relocating. Others have time because they're planning ahead for a bigger family. Some may be tired of renting, but not so tired that they'll pay any price for a house. But don't equate motivation with desperation.

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The Counteroffer PDF Print E-mail
Selling a Home - Offers & Negotiation

A counteroffer is your response to the initial offer. It is not usually necessary to draw up a whole new contract, though that varies from state to state or even county to county. You can tell your broker your new price, and it goes back and forth.

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Lowball bids PDF Print E-mail
Selling a Home - Offers & Negotiation

A lowball bid is one that insults the seller. It's hard to quantify as a figure; it could be 10% to 25% below list price. It depends a lot on you, too. An occasional buyer may be insulting your intelligence, but he's not insulting your house, your mother, or your country.
A buyer may think you are desperate, or a buyer may love your house but not be able to afford your asking price. If you assume the best of most sellers and remain willing to negotiate, you may work the price up to one that's acceptable to you. You have more options than either rejecting the offer outright or making a counteroffer exactly halfway between the offer and the list price.

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Negotiation PDF Print E-mail
Selling a Home - Offers & Negotiation

Agents can be very helpful buffers between you and the seller to keep emotions from getting too high. You may have put a lot of emotional investment and sweat into your home, and it's easy to feel insulted by what you see as a low offer. Agents have a lot of experience in getting two parties to agree on one price.

It's a broker's maxim that "Your first offer is your best offer." That's true in many cases. But a first offer is, after all, a first offer, and you'll probably get a second and third offer from the same buyer, if you remain flexible.

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Contingencies PDF Print E-mail
Selling a Home - Offers & Negotiation

A contingency is an "out" in a contract in case certain conditions are not met by a certain date. Contingencies are there to protect buyers, not you, but they are common in most contracts.

A mortgage or financing contingency lets the buyers back out if they can't find a lender to give them a mortgage commitment at a certain rate by a certain date. If you're fairly certain the buyers can get a mortgage, you may want to stop showing your home.

An inspection contingency means the house must pass inspection by a professional house inspector hired by the buyer.

An attorney approval rider gives the buyer's attorney the right to make changes to the contract.

The buyer may put in a contingency of selling the buyer's current residence.

Buyers may also try to insert contingencies upon obtaining parking, getting a job, selling their current house -- even admittance to a nearby private golf course club, if there is one. As a seller, you don't have to accept all these contingencies in a contract, especially if you're in a hot market.

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