Sizing Up an Offer to Purchase Your Home

Sometimes when you’re selling your home, you’re better off accepting a lower bid with fewer conditions than a higher offer with a lot of strings attached. Ask your agent for advice when deciding which offer to accept, and keep in mind the following:

Price

Know what you can expect for your home based on its location. If the listing price is accurate, purchase offers should be very close. Free market evaluations are available through recognized agents.

A pre-approved buyer

A top-dollar offer is worthless if the buyer hasn’t got the financing on closing day. Ask your agent to stipulate that all offers specify the buyer is pre-approved for a mortgage.

Closing date

Whether it’s coordinating with a job transfer or the end of the school year, you want a closing date that meets your needs. Otherwise, you may have to spend money on an apartment or hotel while waiting to move into your new home.

Bonus payments

The seller usually covers legal and closing costs. However, if a potential buyer offers a lower price that includes such fees, then that offer may be worth considering. Other costs that might be negotiable are the broker’s commissions, the price of a home inspection, the title search and taxes.

Extra costs

Watch out for any clauses that ask you to pay for something out of the ordinary, such as the cost of the buyer getting a mortgage or a house appraisal.

A conditional offer

A purchase offer that is contingent on the sale of the potential buyer’s current home is risky -- if the buyer fails to sell the home, usually within a fixed period of time, your deal could fall through and you would have to put your home back on the market.

The deposit

The deposit that accompanies serious offers is called a “binder” or “earnest money.” It is held in trust by your lawyer or the buyer’s real estate agent until the closing date. Although the amount ranges from 1 to 10 percent of the selling price, a higher percentage indicates a stronger commitment on the part of the buyer.

A home inspection

The potential buyer usually pays for a home inspection. He or she wants to know that such things as the plumbing, heating and electrical systems are in working order. Homes that sell "as is" usually go for a lower price than homes that have been inspected. If an offer requires you to pay for additional specialized home inspections and the cost of repairs, however, be wary. Extensive inspections and repairs can be expensive.

Included in the deal

Most buyers expect their offer to include everything permanently installed or attached to your property, such as a built-in bar or dishwasher and most lighting fixtures. But you may be able to negotiate a higher price if you also include portable appliances, such as a refrigerator or washer/dryer set, window coverings, chandeliers or even furniture in the deal.