Home Seller Options When Responding to a Buyer Offer in Virginia

The Pre-Offer Work
First, let’s review a little background about some of the many things that should have occurred prior to an offer being received. Hopefully, the seller began the process by hiring an Exceptional, Highly Effective Agent who specializes in Northern Virginia real estate. This type of agent is best positioned to reach the seller’s desired outcome in the most efficient and professional manner possible. Prior to receiving an offer, the agent and seller have collaborated on all the vital steps to make sure the home is show-ready to achieve maximum buyer interest.

Importantly, the agent has performed a detailed and thorough Comparative Market Analysis (CMA) for the seller. The agent has determined the most probable and definitive selling price range for the home to help the seller determine the listing price. The agent has listed the home for sale and performed an extensive and customized marketing campaign to create maximum market awareness that the home is for sale. The agent has done everything possible to bring every interested buyer to the seller’s doorstep to see the home. After all this, seller and agent collaboration has worked perfectly and the agent has received an offer from a buyer. Now what?

Agent Review of the Offer & Presentation to the Seller
When a buyer submits an offer to a seller it will be in the form of a Virginia Residential Sales Contract. Exceptional agents have already sat down with their seller in the pre-offer phase and performed a page turn of the contract. The agent has fully explained the meaning of each clause and each contingency addendum that will likely be included in an offer. I perform this activity with my sellers well in advance of a buyer’s offer so at the time of the offer we can concentrate on just the important commercial elements. In my experience, the emotional time surrounding an offer is not the best time for an agent to first explain detailed contract terms.

Now that the offer has been received by the seller’s agent (and possibly even multiple offers), the agent should first examine the offer to make sure it’s a complete, bona fide offer. Each addendum and contingency to the offer must be fully scrutinized. After agent review, the offer is now presented to the seller.

Bullseye

Seller Options When Responding to a Buyer’s Offer
The seller basically has three (3) options when considering how to respond to a buyer offer or counteroffer. Once any offer or counteroffer is accepted by the seller or buyer, the offer or counteroffer immediately becomes a ratified, legally binding contract.

  1. Seller Can Accept the Offer As-is
    The seller can proceed by accepting the offered price and terms as-is with no counteroffer. Sometimes the perfect combination of a home’s price, condition and agent marketing can generate a fantastic offer of full price and other competitive terms that the seller will accept the offer as-is. Upon the seller’s signature, provided it occurs before any expiring time frame established in the buyer’s offer, the offer becomes a ratified contract.
  2. Seller Can Make a Counteroffer
    Most often, a seller will open up the negotiations by rejecting the buyer’s initial offer and make a counteroffer of its own changing the price and/or other terms important to the seller. Once the counteroffer is delivered to the buyer, the initial buyer’s offer is considered null and void. Each counteroffer made by the seller or buyer can be accepted “as-is” like described above at which time the counteroffer will immediately become a ratified contract. It’s also important for the seller and buyer to understand that any counteroffer can be withdrawn as long as it’s done prior to the counter-party’s acceptance. This concept can be very important to a seller while in counteroffer negotiations with a buyer. For example, if the seller was to receive a more desirable offer from a second buyer, then the seller could choose to withdraw or reject an open counteroffer with the first buyer and proceed with the second buyer.
  3. Reject the Offer Completely
    In the event the buyer’s offer price is too low, or some other term or condition is completely unsatisfactory to the seller, then the seller may choose not to counteroffer and instead reject the offer completely. This rejection can be done by either delivering notice to the buyer, or by simply doing nothing at all and issuing no response to the buyer. Seller and agent should work together to determine the best approach and the real estate professionals on both sides usually have a shared goal of keeping an open line of communication between buyer and seller.

Ratified Contract to Settlement – In Escrow
Once an offer or counteroffer is accepted, the Contract immediately and automatically becomes ratified. At this time, the seller and buyer are now what’s often referred to as “In Escrow”. The buyer’s down payment is in the process of being delivered by the buyer agent to the escrow agent and the settlement process has begun.

This is when the Contract contingencies (e.g. home inspection, appraisal, financing, settlement, etc.) begin to go into force with their own requirements and deadlines. It’s not uncommon for the seller and buyer to again be placed back into very limited negotiations around the home inspection with those (3) options again in play. For example, after completing the home inspection the buyer might present to the seller a few requested repairs recommended by the home inspector. These are usually customary type repairs, but it does require an agreement between buyer and seller.

The offer and counteroffer negotiations between and buyer and seller can be a challenging process. Often times, issues can arise that appear problematic. However, that’s where the problem-solving, skilled resolve of an exceptional, highly effective agent can make all the difference. These types of agents are best positioned to help sellers successfully navigate the selling process and reach their desired outcome.

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