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Handling Bids
In some states you'll receive a "contract to purchase"; in others, you'll get a preprinted "offer to purchase" form. The contract to purchase is usually more detailed. You have the right to propose changes to the contract, and refuse to sign it without those changes.
An offer to purchase should list the date of closing, purchase price, earnest money, fixtures, personal property, improvements, date of possession, proration of housing costs, fees, costs, contingencies, and the date the contract expires.
Contingencies
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.
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.
At The Table
Don't talk too much. Keep a poker face, but remain pleasant.
Timing is important. Don't rush back with a counteroffer; that indicates desperation. If you wait too long, the buyer may think you're not serious and pursue other options.
Let buyers know other buyers are interested in your home.
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. Be sure you or your agent do your homework....find out about the situation of the buyer. This could help define the selling price they will go for.
| Get Prepared | Pricing Your Home | Hiring a Pro | Handling Bids | Showing | Closing |