Offers and Contracts
The selling broker registers the offer with their office and notifies the listing broker of the offer. The listing broker then arranges a contract presentation appointment with you and, in some areas, the selling broker. The buyer does not attend the presentation. Part of the presentation is determining that the buyer is qualified financially to make the purchase.
Should either the seller or buyer be located out of town, the contract is presented via telephone and confirmed later by fax.A number of specific concerns are included in the presentation. After all, once the contract is signed, it becomes the binding guideline for the transaction. The offer will include, but is not limited to:
- Date, name, and address of the buyer and seller, and the legal description of the property.
- Amount of the earnest money deposit, which will be held in an escrow account by the broker, unless otherwise noted.
- Sales price.
- Size of the down payment, and how the remainder of the purchase price is to be financed. The offer should indicate the maximum interest rate the buyer is willing to pay, and the right to cancel without penalty if such financing proves unavailable.
- Proposed settlement and occupancy date, and daily rent provision for “post-settlement occupancy” if the seller cannot vacate and becomes the temporary tenant of the buyer.
- Contingencies, if any, such as satisfactory review by attorney, structural inspection, home appraisal, or sale of the buyer’s present house.
- Other important provisions, including a list of items that convey with the sale, stipulation that title must be insured, and who is to pay various settlement costs.
Taken all together, this offer is reduced to dollars and cents on a sample net sheet, similar to the exercise during the listing appointment. The estimated outcome is determined, which allows you to consider the bottom line.
A decision on an offer should be made at presentation, if possible. You as the home seller have three possible options:
- Accept the offer as written.
- Make a counter offer on unacceptable aspects. Counters are written and initialed in the margin of the contract or in addendums. A purchase offer with counters is not a ratified contract until the buyer accepts and initials the counters. Buyers can withdraw, accept or counter the counter offer.
- Reject the offer, if it is totally unacceptable. Outright rejection, without a counter, should be the last resort.
All offers registered will be presented to you in the order registered. You should hear each offer completely and ask questions. No action is necessary until all offers are heard. If more than one offer is accepted or countered, an order of precedence must be established, such as primary, first backup, second backup. Be careful not to sell the home twice.
Questions and Answers
Is it best to turn down the first offers?
In any transaction, it is normal for you to wonder, “Could I have gotten more?” When your reasonably-priced house is put up for sale, the very first lookers may make an offer to buy. That doesn’t mean that you have priced your home too low. It means qualified buyers and their brokers have been looking—and waiting—for the right house to come on the market at just the right price. Your listing broker will advise you on all offers.
Does the sale of a condominium or a property within a Homeowner's Association (HOA) require any special action?
The purchase offer for a condo or homeowner’s association property will contain, in compliance with the law, a requirement that you furnish the buyer with certain disclosure information. Ask your listing broker about condo and homeowner’s association resale procedures in your area.
Do buyers ever offer more than the listing price?
Rarely, but they do offer “above list” sometimes if they believe it makes their offer more acceptable than other competing offers. For the protection of all parties, it is best to include a separate statement signed by the buyers, indicating the buyer’s knowledge of the list price and their reasons for the higher offer.
What do I do if the property doesn't sell?
The first step is to carefully go over with the listing broker why the property has not sold. Usually price and property condition are the key. Study and analyze what has sold in your area and at what price. Then re-list the house after adjusting for shortcomings. Another option is to withdraw from the market and rent until the market improves, or simultaneously offer for sale or rent.
When will the yard sign be removed?
Placing a sign in the yard is always done by mutual agreement between you and the listing broker. The law in Maryland, Virginia, and the District of Columbia allows the sign to remain in the yard after contract ratification, even though “for sale” is changed to “sold” after contract acceptance. Ask your listing broker about local sign ordinances.
If a buyer forfeits the deposit, who gets the money?
If the buyer fails to make full settlement, the deposited earnest money may be forfeited only after a release is signed by all parties. In the event of forfeiture, the deposit will be divided equally between you and the real estate brokers, but not exceed the amount of their commission, or according to the sales contract.