Choosing the Right Offer on your Home

If you're a home seller, you're likely to get multiple offers on your home in our current market. A lot of this depends on price and condition and presentation, yet with the low inventory we've been seeing a lot of this. When that happens, you'll have the opportunity to choose which one to accept. But what if the offer on your home is full price but you'd rather go with a different offer, or maybe even a better offer? 

While there is no obligation for sellers to accept any offer on their home — even if it’s at the asking price — there are some potential consequences if they choose to reject it. 

If you're thinking about rejecting an offer because it's at full price or above, consider these factors before making a final decision:

Why Rejecting an Offer at Full Price is a Risky Move

A seller always has the right to reject an offer they receive. If they don’t like the price or feel that something else is wrong with the offer, they can refuse it and wait for another one. But this choice can be risky if a seller rejects an offer at full price.

Rejecting an offer on your Des Moines home at full price is risky because there are no laws that require you to accept any offers that come your way.

If a buyer makes a reasonable offer that you accept, you are likely to close on it within 45-60 days. But if the seller refuses a reasonable offer, they risk the buyer walking away. If a buyer backs out of a deal, the seller is left with no offer at all. Sometimes it's better in these situations to provide the buyer's agent with a counter offer, rather than risk losing the deal all together

Receiving a Higher Offer After Rejecting

If a seller rejects an offer at full price, it is possible that the buyer will make a higher offer. But there are no guarantees that the seller will receive a higher offer after rejecting an initial offer. And, though you may see in the news that prices are sky high and homes are selling above asking price, that's not a reason for you to counter back with an offer above list price just because. Now if you receive multiple offers while you're negotiating the original offer, that may prompt a higher offer from one or both parties. It's important that you're realistic though, and you will want to ensure you have all the offers in front of you and that none of them are 'hypothetical' or verbal offers.

The key to receiving a higher offer after rejecting one is timing and negotiation skills on both sides of this transaction. Make sure your agent knows what you're looking for in terms of price and terms. And make sure your home presents in a way and at a price that will bring forth more offers if you reject the original offer without providing a counter offer to the buyers or their agent.

Negotiating the Selling Price After Rejecting

Another reason why sellers should think carefully about rejecting an offer at full price is that it is possible to negotiate the selling price after rejecting an initial offer. This is where the counter offer comes in

If the seller rejects an offer at full price, they can still negotiate with the buyer to increase the price of the house or remove contingencies to make the deal more enticing. Sometimes the price is not the most important thing to you as a seller, or maybe you would like something like a rent back or inspection for knowledge only. A lot of this may come forth in price changes, yet the terms can be changed as far as closing date, inspection period, additional provisions and the like. Once all parties have agreed on the changes, if all parties agree, then the contract would get updated and signed.

Confirming that the Offering Price is Actually Full Price

It's important to ask your agent to confirm that their buyer clients have adequate funds available for purchase whether they are paying cash for the home or financing the property. You will want your agent to consult with their lender if financing to confirm everything on the pre approval and get additional details if needed. It's important to know not all lenders and pre approvals are the same, so doing this helps ensure accepting this offer will be in your best interest. That means that so long as everything goes as planned with inspection and appraisal, there generally shouldn't be any financing related issues.

If an offer at full price is made on a seller’s home in cash, your agent can ask the buyer to submit proof of funds. The buyer can submit bank statements, investment statements, or other documents that prove they have the money needed to buy the house. If the buyer offers to buy the house at full price, but fails to provide any financial documentation, the seller can only take the buyer at their word, so tread carefully in these situations. When in doubt, always ask for some sort of documentation.

The Pros of Accepting a Full Price Offer

There are some advantages to accepting an offer at full price. If you are buying a new house, accepting an offer at full price, if that's the only offer you receive, will help you achieve your goals of getting into your new home quicker. If you reject that offer, you run the risk of waiting to find a buyer who is willing to offer more, or, depending on what happens possibly less. If you reject an offer at full price and decide to wait for a higher offer, you might never find one.

CONCLUSION:

If you're selling your home, it's important to know how to respond to a buyer's offer. And depending on your circumstances, you might even have the power to reject an offer at full price and ask for more money. But before doing that, you need to consider all of the relevant factors and make sure that the move will benefit both you and the buyer. After all, this is a big decision—accepting or declining a full-price offer is not something that should be taken lightly.

The point to hold on to here is that rejecting an offer at full price is not a decision that should be taken lightly. Before making any final decisions, it's important to go over the offer with your real estate agent, as well as consider other options that might present themselves with different buyers.

We hope that this was helpful information on what to consider when choosing an offer for your home. If you want more information or want to know whether it is a good time to make a move, feel free to give us a call. We are here to help you navigate the buying and selling process with ease. Let us be the key to your home needs in Des Moines and Central Iowa!