Got an Offer on Your House...Now What?

Naturally, you will do a ton of work to prepare your home for showings to make buyers fall in love with it. But do you know the things you need to do when it finally pays off and you receive an offer?

Here are five things that you need to think through to seize the best deal for your home!

How To Know If It Is A Good Offer?

It all comes down to expectations. What are your expectations of that offer?

The first thing that you need to do is know your numbers. Talk to your mortgage broker, know your numbers well and create a strategy. Ask about your mortgage status and if there is anything else that you need to pay. Ask how much equity you need to purchase your next house.

The next step is to lean on your realtor to understand the market. The best thing you can ask from your realtor is to pull the stats for all the houses that came on the market and have sold since you listed.

If you had only listed a few days ago, you're not going to see much change. But you might be surprised, so do not skip this step! See what else has happened over the last weeks or months that you've been on the market. Use the data to understand the market and know where you are at.

The third thing that you need to understand is the terms and conditions. Terms and conditions in an offer are two different things. A term is something that will happen by possession date. A condition is something that needs to happen to make a firm sale.

A term is something that everyone agrees on to be done in the future. It could be about a specific part of the house that the buyer wants to be cleaned up by a particular date. It could also be something that needs to be fixed, like the chimney or the fireplace. This must be done by a professional with receipts for documentation.

A condition could be about financing. The buyer has to make sure the bank approves their financing for a particular house. Even if they received a pre-approval for a new home, it's not tied to any property. The bank still has to approve and finalize the financing agreement before affirming a sale.

How Long Does an Offer Take to Be Accepted on a House?

The timeline typically depends on the market you're in. It could take an hour or go for a few days.

If you're in a seller's market, you could see an offer come in, where the buyer wants to tie up the house. For example, a potential buyer can write an offer on a house with certain terms and conditions and leave it open for only a few hours. They can do that if they want to quickly tie up the house and make sure they won’t lose it.

Offers are obviously more advantageous to the seller in a seller’s market. A buyer could write an offer where they just want the seller to sign right away! With a good price, good terms and conditions, they just want to make the purchase quick and easy.

On another scale, in a buyers market, a seller could get an offer, and end up having it open for four days. Each party can go back and forth in negotiating to figure things out. There is no rhyme or reason, but it does depend on the market.

In a buyer’s market, everyone will try to negotiate on the price, get the best terms and conditions, longer dates, lower deposits, etc.

How Do You Respond to an Offer?

There are three ways to respond to an offer. You can choose to reject the offer, accept it, or counter it.

When you receive an offer and you think the possession date isn't proper or the price is not as good as you were hoping, you can negotiate about it and make a counteroffer. When the buyer reviews it, they also have a choice to reject, accept or counter it.

In real estate, nothing is solid until it is in writing. If you verbally negotiated something, it is not a legal agreement until it is in writing and everybody has signed the document.

Can a Buyer Back Out of an Offer that is Already Accepted?

The answer to this question is yes, and no. It depends if there are conditions set forth.

If the buyer does not have any conditions on the home and they made a firm sale, they can no longer back out on the deal. If they are adamant to walk away, they will lose their deposit(s), and they could even have a lawsuit on their end.

If the buyer has conditions, they can walk away, for example, if they encounter any issue with their financing condition because of their bank or insurance. Also, if something comes up after a home inspection, and it's too much of an expense and turmoil for the buyer, they can drop the deal. If this is in line with their conditions, they are entitled to refund their deposit.

Can Another Offer Come in on a Home That Already Has an Offer on it?

When you are sitting with an offer that’s conditional upon certain things like doing a home inspection, or the buyer’s financing, you can still accept other offers but have them as backup offers.

As a seller, the key is to have a seller's condition. If the first offer collapses and doesn't stay together by a certain date, then the second offer will be considered active. It is best to work with your agent and real estate lawyer to help you sort out the conditions and execute them properly.

If you have questions that you want us to help you with, just reach out, you can email us at info@chamberlaingroup.ca or you can give us a call at 587-316-5400 and