Not so Fast, the Seller Has Something to Say
You have filled in the purchase agreement form and your realtor has presented your offer to the vendor, usually via the seller’s real estate agent, for their consideration. One of three options is about to happen. Your offer may be accepted as is, (wouldn’t that be nice?), or you may receive a counter offer based on one or more terms of the agreement, or they just might refuse your offer outright.
The home we made an offer on was listed at a fair price for the size and location. Before making our offer to purchase, we had done our homework. We knew when the vendor had bought the house, his purchase price, what improvements he made and estimated costs, and the expected sale price, not the listing price, of similar homes in the area. Our offer was made based on a price where he wouldn’t lose monies overall. We determined that he had paid under the median sale price for the day for a house built in 1982 but, slightly over the price he should have considering the improvements he intended to make. Judging by the improvements he did make he probably did not anticipate selling for a few more years. Our original offer was 8% under listing price.
The vendor had made all the necessary improvements, a new roof, a new HW tank, a new furnace with AC and hepa filter, flooring, added a dishwasher, a new double garage and fencing. The only improvements we want to make to the house are basically cosmetic and for convenience. Our first offer was refused and they counter offered at a higher price, down 3% off listing.
Dining Room
The dining room is only accessible through the kitchen. We intend to make access from the living room by adding french doors and adding a French patio door leading to a patio deck in the back garden area. On our counter offer, we stressed the dining room access problem and increased our bid by 1/2 percent.
The vendor still wanted more monies and returned an offer 4% off listing. We returned with an offer 1 1/2% over our original, 6 1/2 percent below listing and the offer was accepted by the seller.
The services of an experienced Realtor who can present and explain the concerns you have in your offer, without letting emotions cloud the negotiations, is invaluable to arriving at a fair, best price. When both parties are happy, both seller and buyer, the finalization of sale goes much smoother. There are still two visits that need to be made to the home. An inspection by a professional home inspector and the final turnover of title and possession.
When the vendor counters your offer, usually for a higher price, there will be a time limit imposed for you to consider your options. You can accept their counter offer, return a new offer, or walk away from the deal altogether and dispense with further negotiations. An experienced realtor should be able to advise you whether or not a new offer is worth pursuing.
The vendors may add their own conditions to a sale – such as “subject to confirmation, the purchaser can complete the purchase of (the property) by: (possession date)”. They may need extra time to complete the purchase of their new home or need a hastened payout in order to complete their purchase. Perhaps they might disagree to what is included in the sale, appliances, drapery, etc. Rarely should the terms of sale, other than the purchase price, result in a refusal of sale, reasonable parties should be able to amicably reach a satisfactory agreement.
Once both purchaser and vendor agree to all terms and conditions of the Contract of Purchase and all papers have been signed, dated, and witnessed, you have an accepted offer and are now committed to a binding contract, subject only to the conditions being satisfied. Your next step is to send a copy of the paperwork to your lawyer to make sure “T’s” are crossed and “I’s” are dotted and the sales contract is in proper “legalese”, (the language of non-understanding). This is only a preliminary stage in the lawyers role.