The saying “Luck is when preparedness and opportunity meet” is a very appropriate thought for this occasion. For most of us, to receive an offer on our home rarely happens during our lifetime. Most often, your agent will not suggest a method of how to handle this meeting, but we want you to have all the information you need to make good decisions.
Here is a good guideline to prepare for the occasion.
Some time has passed since the listing date. Ask the agent to bring or email updates on any closings and new pending contracts on other similar homes. This information provides a sense of the activity of like homes in the marketplace. Ask for new listings that are now competitors, not on the market when you listed your home. For example, if learning there were no closings or new pending contracts, but fifteen new listings, could this information be helpful when considering an offer?
Ask your agent to email a copy of the offer before your meeting. Explain to them this preview will allow the focus during the meeting to be on the real issues without the distraction of all the legal jargon in the offer. This review provides time to formulate your questions. If they balks at this suggestion, suggest to them it will add to the quality of the conversation and conserve time. The agent may be concerned that sharing the offer without their presence may cause you to react negatively toward the proposal. Reassure them you realize rejecting an offer out of hand is almost always a poor decision.
Focus on the written document and the facts. In most cases, your listing agent will not be the agent writing the offer on the house. The conversations with the buyer are being transmitted in the “offer to purchase” document. Your agent will also be interpreting the position of the buyer through the words of the agent working with them. The result is there will be oral snippets and impressions from the buyer that are second or third hand.
Paste “drop dead dates” in the contract into a calendar or ask the agent to do it beforehand. This task demonstrates clearly the exact timeline proposed to determine if the timing works for you. This simple action serves to establish when to expect a future call, or a notice eliminating a contingency. It also notifies you when to take an action, like calling the movers, or canceling your insurance policy.
When reading the offer contingencies, take notice whether the “5 W’s” are present in the language of all contingencies; who, what, when, where and why. If there is a cost associated with the contingency, who handles it? When an approved pre-printed form is unavailable for a contingency and the selling agent drafted the language, read it carefully. Contingencies are a “Red Zone” for agent drafting errors.
It is easy to overlook common contingencies with the many pages to review in today’s real estate offer to purchase agreements. Here are two to watch for:
- How to handle occupancy after closing a home sale.
- Consider not closing and moving out the same day unless you have already secured your next home and would not be moving back to this home if the closing failed. Agreeing to vacate on the date of closing creates additional pressure, potential uncertainty, and extra expenses.
- Keep track of items you are asked to leave in the offer. If there are counter-offers going back and forth, items can be omitted accidentally and create issues on buyer move in day.
Write down any review questions from the offer. When the agent arrives, allow them to present the entire offer uninterrupted, taking notes and writing down new questions as they go through the document. At the end of their presentation ask your questions and record the answers. When this process is complete, ask the agent for their opinion of what they would do and why. Feel free to ask the agent follow-up questions and even challenge their assessment if you still have questions. Assuming you reviewed the changes in the market, read the documents and contingencies and created a calendar timeline, the information needed to make an informed decision is clear.
Click here to go back to real issues that buyers encountered on this step.