Negotiating Offers (Part 1)
When planning to sell a property, offers and counter-offers are always a part of the negotiation process. It is this back and forth negotiating process that will eventually lead to property sales once all parties involved agree on the terms and conditions.
Legally, the agent acts as the middleman between you and the potential buyer, and is the one to pass all offers to you and send a written confirmation on your behalf to the potential buyers. In case you have specific criteria all potential buyers must meet, it is the job of your agent to reject all offers that do not meet this criteria. However, it best to receive all offers so you can weigh up all the positives against the negatives.
Usually, when an offer is received, the quality of the offer will be determined by a combination of several factors.
Here are some of the questions to consider concerning an offer when selling a property:
Is the Buyer Ready?
- A well-prepared buyer is expected to have secured an ‘offer in principle’ for a mortgage in case one is needed.
- If a buyer is serious enough about the purchase, such buyer must have worked out how much they can afford if they are going to need a mortgage before sending an offer.
- Do they have a solicitor in place already to kick-start the process in case the offer is accepted?
- A buyer who has shown certain level of readiness now is likely to be more reliable during the sales process.
What Is Their Situation?
- Do the potential buyers have another property to sell or are they a chain free buyer?
- In case they have a property to sell, the question you should be asking is if the property is on the market and under offer already.
- Are the potential buyers’ moving time frames suitable with yours? A flexible buyer would be beneficial if you’re still negotiating an onward purchase.
- Are your potential buyers paying cash or will they need time to process a mortgage?
- Is the decision to buy solely that of the buyer or are there other associated people who are yet to see the property? For instance, if a wife is representing the family during the negotiation while the husband is away but has to wait for the husband to see the property before the deal can be completed.
- What is the variation between the market price and the minimum price your agent is expected to achieve?
- Is the offered price (regardless of the level) sufficient enough to cover your onward purchase?
- Where the price is lower than expected, are there other factors that can make up for the shortfall. For instance, the speed of purchase may make up for the shortfall.