WHAT DO I DO ONCE I'VE MADE AN OFFER?

Ideally the seller will accept your offer, and you'll live happily ever after in your new home (once the paperwork is finished). More commonly, though, the seller will decide to work with your offer but make a counteroffer that alters the price, the terms of the offer, or both.

What Happens After an Offer

Once you submit your offer to your agent, there are a number of things that can happen. You can expect the process to follow a basic procedure, though:
1.Your agent presents the offer to the seller
2.After reviewing the offer, the seller either accepts or turns it down
3.If the seller rejects the offer, he or she may counter with a new offer
4.You can accept the counteroffer, or turn it down and counter with an offer of your own
5.This will continue until both parties agree on the terms and price

How to Read a Counteroffer

Receiving a counteroffer is a positive sign, because it means the seller is willing to barter with you. Once you receive a counter, there are only a few routes that you can take if you don't want to walk away:
1.You can accept the offer if you find the price agreeable.
2.You can counter with your own offer and suggest a compromise between your original offer and the seller's counteroffer.
3.You can repeat your original offer, if you believe it's a good price (and a fair one).
Your best bet is to either accept or compromise by countering with an offer between the seller's offer and your initial offer. If you choose to stick to your original offer, you're basically telling the seller that it's your way or the highway. And no one appreciates working with someone unwilling to compromise.

Movoto's Buyer Tip:

Consider splitting the difference with the seller if you really want the home but are having difficulty finding a mutually agreeable price. You could move into your new home much sooner if you're willing to go up $1,500 and he or she is willing to drop the price by $1,500 to meet in the middle.

Negotiate the Right Way

If you decide to negotiate on the price, you should be aware of different market factors and base your negotiations on these conditions.
This includes:
  • How well-priced the home is
  • The length of time it's been on the market
  • How motivated the seller is
  • How invested you are in the home
  • Whether market conditions help you (buyer's market) or hinder you (seller's market)
Following these evaluations, your agent will give you an estimate of what your offer should be. But don't just take his or her word for it–do your own research as well.
Remember that your agent is trying to make money off the sale, so of course he or she wants the higher commission that comes with a higher price.

Negotiate Your Best Deal

The primary factors that you want to negotiate are the price (of course) and the terms. Yet you can also haggle for a number of other components should you want to, including closing costs, repairs, occupancy, and more.
But how do you successfully negotiate any of these terms?
An agent can potentially be of help, although he or she is often trying to ensure the transaction occurs and may only want to lower the price by a small amount. Your best negotiator is you; you just need to learn how to do so successfully.
You have every right to make a low offer and then insist on terms that benefit you--it is your money and your future home, after all. So how do you approach the negotiation process?
  • Be polite. Insulting the seller or the seller's agent will get you absolutely nowhere--he or she is not obligated to sell to you. Refrain from turning negotiations into a personal fight (and using insults), or you'll lose out.
  • Establish a time limit. If you allow the seller only a small window of time--say a day or so--to make a decision, it prompts them to choose or lose. A time constraint also minimizes the amount of time in which a better offer can be made.
  • Stay strong. Don't give in and agree to pay more if at first the seller rejects your offer. Convince your agent and the seller that you aren't willing to pay any more than your offer (even if you are), and the seller may give in to your price.
  • Figure out the seller's motivation. Find out if the home is in foreclosure or if the seller recently lost a job, is moving, or is getting divorced. One of these scenarios would likely mean he or she wants to unload the property quickly, and you'll have a better chance with a lower offer.
  • Compromise. Be willing to introduce a counteroffer--but only once you're positive the seller won't accept your initial offer.
  • Trade price for terms. If the seller rejects your price, strike a bargain. Say you'll agree to their price if they give you the terms you want, such as including furniture and covering part of the closing fees.

How To Spot When Something's Fishy

Although all sellers initially start out with the intent to unload their property, some turn out to be much harder to to work with. These types of people can almost be considered phony sellers, because you end up wasting your time trying to negotiate with them.
Phony sellers typically have unrealistic expectations, or they refuse every offer for the home because they're too attached to actually go through with selling.
If you pay attention, you may be able to spot one and save yourself the hassle. Fake sellers usually:
  • Grossly overvalue their home. A phony seller will give an unrealistic asking price, then won't accept any lower offers and won't listen to reason.
  • Lack motivation. A fake seller claims to want to sell, but he or she doesn't have any real need to do so (versus an upcoming marriage or job transfer).
  • Have an unlimited time frame. Phony sellers have no time frame in mind, and either seem to drag out the process unnecessarily or use yours to back you into a corner. A motivated seller has his or her own deadlines to abide by, or at least tries to be considerate of yours.
  • Don't cooperate. Phony sellers seem to create more obstacles than they help solve, while real sellers will work with you to try and make the transaction go as smoothly as possible.

Make Way for Escrow

Hopefully negotiations will lead you and the seller to a ratified offer, or an official contract signed by both parties representing agreement on the property's price and terms. Then comes escrow--where a neutral third party holds all documents and funds until closing takes place.
The escrow holder, also known as the escrow officer, has a number of responsibilities pertaining to your transaction. A good escrow officer should:
  • Act as a referee between you and the buyer
  • Prepare and review paperwork relating to the transfer of title
  • Follow any and all instructions pertaining to the transaction (for both buyer and seller)
  • Be able to calm down any situation and hold the deal together

Movoto's Buyer Tip:

Take the time to get on your escrow officer's good side and make yourself available to him or her. Call or take a trip to the office and introduce yourself. Ask to make sure he or she has all of the necessary paperwork and whether you can provide any additional information that will help the process go more smoothly.
CHAPTER 9

Sources:

Tips & Traps When Buying a Home: 4th Edition, by Robert Irwin
Home Buying Guide for Dummies: 3rd Edition, by Ray Brown and Eric Tyson
100 Questions Every First-Time Home Buyer Should Ask, by Ilyce R. Glink