“The higher the price, the better the offer” right? No, it’s not always about the price. Do not let yourself be fooled by this popular misconception, though in a perfect world, without any contingencies, a cash buyer and a quick closing, this may be the case.
However, price is not always the determining factor when accepting the best offer on your home, for several important reasons: The initial offer is usually not final, and there are a number of terms and conditions that may influence the final agreed to price. You need to rely on your trained real estate agent to help you thoroughly evaluate and understand every proposal without compromising your marketing position.
Negotiating the right way and accepting the best offer on your home
As a trusted Realtor for over 20+ years, I take the ethical responsibility of fairly and skillfully negotiating contractual terms, helping clients make the best decisions when accepting the best offer on your home. As a licensed real estate agent, it’s my job to find a win-win agreement that is beneficial to all parties involved, but my fiduciary responsibility is to you the seller, if I’m your exclusive agent. As the seller, you may even have to deal with multiple bids before ratifying and accepting the best offer on your South Shore home, which suits your needs and expectations. As your real estate agent, I will guarantee a thorough and objective assessment of each offer and the merits of each, if there are multiple offers, to help you make the right decision. My fiduciary responsibility is to you, my client, so you never have to be concerned that your negotiating position is being compromised.
Negotiations of the initial offer to purchase are critical because they are contractual once accepted
After accepting the best offer to purchase your South Shore home, it becomes a contract and an effective legal agreement between the buyer and seller. The offer to purchase is meant to be a legally binding agreement that requires a financial consideration and agreed upon terms. This consideration, initial and additional deposit, is typically held by the seller’s agent in their bank escrow account pending the fulfillment of conditions or contingencies in the final purchase and sale agreement drafted by the buyer’s or seller’s attorney. Some important tips to keep in mind to streamline the process even further are:
When accepting the best offer on your home, keep written records of everything
For the sake of clarity, it is extremely useful to transcribe all verbal agreements including counter-offers and addendums and convert them to written agreements to be signed by both parties. Your trained real estate agent will do this and assists you and your attorney in drafting all paperwork for your sale and will make sure that you have copies of everything.
It’s important to stick to the specified dates and schedule in the Agreement
Now that you’re done reviewing and negotiating and accepted the best offer on your South Shore home that suits you and your family, you and the prospective buyer will be given a comprehensive timeline that both parties will need to adhere to as part of the transaction and ultimately closing on the sale. Meeting the requirements and terms on the outlined time schedule ensures a smooth flow of the process and ensures that each party involved is not in breach of their written agreement. As your Realtor, I will keep you constantly updated on any upcoming important dates so you will always be prepared for the next step. In some cases, extensions are necessary, but it is typically discouraged.
Inspections, appraisal and financing contingency
As part of accepting the best offer on your South Shore home, most if not all buyers will have the property professionally inspected by a licensed home inspector within the time frame that was agreed upon in the initial offer to purchase. Some buyers will have several different inspectors inspect the property, if they wish to obtain professional opinions from inspectors who specialize in a specific niche (e.g. roof, HVAC, structural, electrical, plumbing, pest, 21-E, Radon, etc). Typically, an offer to purchase gives a buyer between 7 and 10 days to have the property inspected and if the findings of the inspection are not satisfactory to the buyer, they have to notify you the seller, typically through their agent or Attorney that they wish to void the offer and walk away, or renegotiate the price or terms. If the agreement is conditional upon financing, which many transactions are, then the property will be appraised by an independent licensed bank appraiser to determine the fair market value for the lending institution. This is done so that the lender can confirm that their investment in the property is at or above the purchase price. This is done through an independent third-party who is contracted through a servicing company that randomly orders the appraisal. The bank is no longer in charge of picking and choosing the appraiser to ensure it is an independent and arms length analysis.
The Closing Attorney
The attorney for the buyer’s lender is typically called the “closing attorney”, whose job is to examine and ensure “Clear Title” and close the loan on behalf of the lender to buyer. After researching the complete recorded history of your property, they will certify that 1.) Your Title is free and clear of encumbrances (e.g. mortgages, leases, or restrictions, liens) by the date of closing, and 2.) All new encumbrances are duly included in the foregoing Title. Both Seller and Buyer have the right and are suggested to have their own legal representation to review all documents prior to and at closing.
A contingency is a condition that must be met before a contract becomes legally binding. For instance, a buyer will usually include a contingency stating that their contract is binding only when there is a satisfactory home inspection report from a qualified inspector or a lender provides them with a firm commitment for financing. If the home inspection reflects minor or major defects in the home, the buyer has the right to terminate the offer by the written date in the offer to purchase. If the financing contingency is not met, buyer must notify the seller they wish to terminate the agreement or request an extension if more time is needed. Before completing his or her purchase of your property, the buyer goes over every aspect of the property, as provided for by purchase agreements and any applicable addendums. These include:
- Obtaining financing and insurance;
- Reviewing all pertinent documents, such as preliminary Title reports and disclosure documents;
- Inspecting the property. The buyer has the right to determine the condition of your property by conducting a range of inspections, such as roof, termite/pest, chimney/fireplace, property boundary survey, pool/spa, arborist, mold, lead based paint, HVAC, etc.
Depending on the outcome of these inspections, one of three things may happen:
- Either each milestone is successfully closed and the contingencies will be removed, bringing you one step closer to the closing; or
- The buyer, after reviewing the property and the papers, requests a renegotiation of the terms of contract (usually the price); or
- The buyer notifies me that they wish to terminate the agreement and return their deposits. In this case your real estate agent will attempt to uncover the true reason for the buyer’s change of heart and see if the transaction can be salvaged.
How do you respond objectively and fairly to the buyer when a renegotiation is demanded? This is when the help of an experienced real estate agent can make a real difference in the outcome of the transaction. Having dealt with various hundreds of property sales in my career, understanding what is reasonable and what is not, is the level of essential experience you can rely on by having me as your trusted agent.
Loan Approval and Appraisal
I suggest that when you’re accepting the best offer on your South Shore home, you only accept a buyer’s offer who has a lender’s approval letter for the amount at or above the proposed purchase price for your home. Expect an appraiser to review your property and that the sales price is appropriate and in line with the fair market value. I will oversee the required paperwork that the buyer must present with their offer.
Final Walk-Through Inspection
More of a formality than anything else, the final walk-through with the agents and buyer usually takes place the day before, or the day of the closing. The seller is typically not present for this. The buyer visits the property to verify that all is in working order, the condition is the same as when the buyer last viewed the property, or requested items have been corrected and that there are no extra personal items left behind. At this point, the property should be clean and broom swept.
Smoke Detector/Carbon Monoxide Detector Inspection
All Massachusetts property owners are required to have their home inspected by the local fire department to insure working smoke and carbon monoxide detectors are placed in accordance with Massachusetts law. A certificate must be provided to the buyer at closing. Your real estate agent will coordinate the inspection and attend if you are not available. The cost for this inspection usually ranges from $50.00 to $150.00.
Final Water Meter Reading
As a property owner, you are required to obtain a final water reading from your town’s or city’s water department, unless of course have private well water. I will assist in coordinating this final reading and make sure the paperwork is provided to the closing attorney for the final Closing Disclosure.
As the seller of a condominium, you are required to provide the buyer with a 6D certificate. This certificate is an affidavit signed by the condominium association trustee(s) verifying that all condo fees and special assessments have been paid accordingly and there are no outstanding fees or liens associated with the unit. Typically, there is a small fee payable to the association for the 6D certificate. Also of note, if you live in a subdivision of home, not condos, and there is a Homeowners Association, you will need a letter from the HOA Trustee certifying that all fees and assessments are paid in full. This is different from a 6D certificate.
Cancel Home Services and Utilities
As your real estate agent, I can provide a list of useful numbers for the termination of home services and utilities in preparation of the final closing.
As your agent, I am ready to assist you should an unforeseen glitch arise, even at this last stage. If something at the property breaks down at the last minute or the buyer’s loan funding does not pull through on time, there is no need to worry. I have encountered these problems before. I know how to handle them efficiently and in a stress-free manner.
The closing attorney will furnish all parties involved with a settlement statement, called the CD (Closing Disclosure). This summarizes and details the financial transactions enacted in the process. The buyer(s) will sign this statement and then you will sign as seller, certifying its accuracy. If you are unable to attend the scheduled closing or prefer not to, you can opt to give your Lawyer, what’s called “Power of Attorney” limited to the real estate transaction thereby representing you at closing without your attendance. Obviously, you need to sign all necessary paperwork in advance, especially the Deed in order to close and go on record at the Registry of Deeds. You can elect to either have the funds wired electronically to your account at your financial institution or have a check issued to you upon the recording of the Deed. Many Attorney’s chose to close at the Registry of Deeds so the recording is immediate and the funds can be dispersed immediately, but more becoming more common is an electronic recording, which is just as effective. This excludes Land Court recordings. The seller should arrange to have all property keys and any other important information for the new purchaser at the closing, so that the purchaser may receive these items at this time.
Now it is time for congratulations!
To contact Realtor George Jamieson, please call 617-877-4839 or reach him by email at George.firstname.lastname@example.org. If you are thinking of selling your home or would like to know the value in today’s market, please contact George today.