3 Practical Ways to Respond to an Offer as a Home Seller
In theory, there is no requirement for a home seller to reply to buyer bids within a certain time. Because there is no set time limit, you can take as long as you like to respond. However, it is typical practice in the sector to respond to interested buyers within 24 to 72 hours. This is standard ethics observed by many industry experts.
When a qualified homebuyer makes an offer, you can respond in one of three ways:
1. Take the offer as it is – For any buyer making an offer, this is the best-case scenario. It can be worth signing on the spot if you receive a fantastic offer and agree to all of the purchase contract’s terms, conditions, and contingencies. When a buyer accepts an offer without adjusting, the buyer can proceed to the house inspection.
2. Make a counteroffer – While some bids may be close to what you’re looking for, others may include a few deal breakers on your end. This is when you can make a counteroffer, which allows you to return with a proposed price or change to satisfy your demands and continue the conversation.
When you make a counteroffer in response to an offer, you can add things like:
- A higher cost.
- A lower price, but with the option of removing appliances or furniture that were previously included in the purchase.
- The closing costs are split differently.
- Various contingencies or criteria should be met to execute the transaction.
- A change in the deadline.
The buyer will have a timeframe to respond after you send a counteroffer. They will only be given the option to accept or reject the offer.
3. Write down your rejection of the buyer’s offer – It’s not uncommon to receive many offers on your home, especially in a seller’s market. While you are not required to issue a written rejection of an offer, doing so is generally courteous. This tells the buyer that it’s time to move on to the next house. However, after you’ve written down your rejection of an offer, it’s tough to provide that buyer a counteroffer if your accepted offer falls through.
While you or your listing agent may confirm receipt of a buyer’s offer, it does not imply that you or your listing agent will respond. You may not react for a variety of reasons:
- The price is either too high or too low. A lowball offer, especially one that is much lower than the asking price, maybe disrespectful and indicate that the buyer isn’t serious. Meanwhile, an excessively high offer may not be feasible, especially if the buyer would require financing. The lender authorizes the loan only when an appraisal has been done, and the loan is within the home’s market value.
- You want to look over all of the offerings at the same time. It’s a good idea to wait until all offers are in before replying to purchasers if you want to analyze all of them at once. The only disadvantage is that other qualified purchasers waiting for a response may withdraw their offers.
- You’re planning a public open house. If you have an open house coming up soon, it could be a good idea to wait until after the event to analyze offers to get the best deal.
- Work with a seasoned real estate professional. When you have a real estate agent on your side, entertaining and assessing purchase proposals will be a lot less stressful. They will assist you in selecting the “best” offer for your circumstances, rather than the one with the greatest offer price. Working with a seasoned real estate agent will help ensure that you are well-versed in the procedure.
Home Seller? Make a list of advantages and disadvantages.
You can develop a spreadsheet with the help of your agent to clearly understand the pros and downsides of all the offers on the table. Will you accept a slightly higher offer price in exchange for a shorter closing period or a slightly lower offer price for a more flexible closing date? Working through the advantages and disadvantages can help you settle these issues based on your current situation and hopefully lead to the best decision.
Why Isn’t The House Seller Responding?
Each seller is unique, and they will not always have the same reason for declining a purchase offer, but here are the most prevalent ones.
- The Offer Was Inequitable. When the offer is too low, sellers may not bother with a response. But how low can you go before it’s too late? It depends on the circumstances. The majority of sellers will reject any offer 10% less than the market value. They find it demeaning, and they don’t want to deal with a counteroffer’s back and forth. Some vendors may be insulted by your lowball offer, believing you are attempting to exploit them. A low offer can also indicate that you aren’t serious. You’re tossing a dart into the air to check if it lands. Again, especially if you’re bidding in a seller’s market, sellers will not spend their time. However, in rare situations, sellers cannot counter numerous bids simultaneously or even make multiple counters on a single offer.
- The Price Was Excessive. It may appear counterintuitive, but a house seller’s refusal to respond could result from your offer is too expensive. Most real estate agents will advise their clients not to accept an offer that is too high. This is why. Unless the buyer pays cash, they won’t bid over or even close to the asking amount; they’ll need financing. If a buyer offers more than the home is worth, no lender will authorize a loan for the whole amount. The lender will require an appraisal and valuation to calculate the loan amount. Check the market worth of homes in the neighborhood if you made an offer on the house and received no response. You’ve got your response if your offer was significantly higher.
- They were given a better deal. There’s a good chance you’re not the only one interested in the property in today’s market. At any given time, the vendor may get several offers. Because sellers have the same amount of time as you, they may prioritize the offers and respond only to those they want to challenge or evaluate.
What distinguishes one offer from another?
Of course, money always speaks. A higher-than-market-value offer will pique a seller’s interest more quickly than a lower-than-market-value offer. However, it isn’t always about the money. Sellers also scrutinize contingencies. If you have a few contingencies in your offer but another bidder does not, yours may not be accepted because the other buyer preferred the other offer.
You failed to meet their requirements.
Sellers have needs in the contract and terms of sale, just as you do with your house. Sellers may require the following items:
- Write a Verified Approval Letter from your lender. This gives sellers confidence that you’re qualified to buy the house and won’t back out of the deal, leaving them with no way to sell it.
- They have a shorter escrow period because they are in a hurry to move. They may choose someone who can close in a few weeks if they are relocating or have other pressing reasons to relocate quickly.
- Because their new home will not be ready until later, they will need more time to close. If a seller is purchasing and selling a home simultaneously, they may require additional time in their present home until their new home is ready.
- A larger earnest money deposit is required. In some places, sellers want large earnest money deposits to ensure you’re serious about purchasing the property. They may reject your offer if you cannot make a sufficient deposit.
- You can ignore the house inspection’s details and refuse to force them to pay for and complete the repairs. Some sellers don’t want to deal with the problems with the house. They want to sell it and be done with it.
Is it necessary for the home seller to respond to your offer?
Although it’s inconvenient, sellers aren’t required by law to respond to your offer. They don’t have to answer if they don’t like it, are offended by it, or don’t have the time. When making an offer, follow the seller’s offer instructions to enhance your chances of receiving a response and make your offer competitive.
While it is uncommon for a house seller to fail to reply, it does occur, particularly in the case of many offers or a bidding battle. Sellers frequently prioritize the bids they’ll evaluate and respond to, ignoring the others if they aren’t legally required, which varies by state.
Speak With Your Agent
During this period, it’s critical to speak with your agent. Your agent has most likely dealt with similar situations before and can help you navigate them. They may have suggestions on how to proceed, such as modifying your offer, waiting it out, or drafting a letter to the seller explaining why you want the house.
Real estate brokers are skilled at reading people and circumstances and can assist you in determining the best course of action, ensuring that you do not make any foolish mistakes and waste money.