The Daniels and O’Keefe Team's Blog
I get it. I really do. When your house is on the market, and your phone rings and 'tis I, your Realtor, the anticipation for the news I may deliver is palpable. If I am not calling about an offer, I will make that very clear the second you answer the phone (usually before the 2nd ring). I have bought and sold, and I know what it is like to have your house on the market and hope for an offer from someone who fell in love with the house (and wants to pay you a lot of money) as you did when you purchased it. What Carole and I won't do is call you when we hear that an offer may be coming in. There are way too many little things that can happen from point A to point B that can derail the process. Until the offer has reached our very ready emailbox/fax machine, we don't have anything "in hand". It is our job to manage your expectations, and our job to keep your already high stress level as low as possible. To cut to the chase - It is very important to keep in mind that once you decided to sell your home, it became a business transaction. Not personal. This is not about someone loving your artwork, furniture, or wedding photos. Although it is a very personal business, at the end of the day - it is business. I will continue to emphasize this. A buyer(s) has made an offer to purchase your home. Fantastic. If you heeded our advice, you priced it as accurately as we recommended. It is truly the buyer who determines market value. If the buyers in the market deem the price to be spot on, one or more buyers could very possibly make you an offer for your asking price or above. This is good. This may happen within the week that your house comes on the market. This does NOT mean that you underpriced your house. This does NOT mean that you have permission to all of a sudden get greedy and overly confident and wait for more offers. What this does mean is that you have well educated buyers who agree with your list price and have stepped forward and made a very good offer for your house. Feel free to digress or come back to a former post "How to Lose a Sale in 10 Days". If your house does not sell immediately, it does not mean that you necessarily priced it incorrectly - at all. It just means that your buyer has not seen the house yet. The offer to purchase your home is completely negotiable. Terms of the offer (this pertains to Massachusetts only) are as follows: Offer Amount: The buyer wants this to be the lowest number possible. You want this to be the highest number possible. Sometimes, a buyer will offer you your list price (see above), and sometimes, the buyer may want to "try" out a number and it is very low, do not take it personally. Just counter offer. This is business.
- Amount of Deposit with the Offer (typically $1,000). This is deposited into an escrow account if and when the offer is accepted. You will not receive the proceeds until the closing. The escrow account is typically managed by the listing brokerage firm.
- Amount of Deposit to be paid with the Purchase & Sale Agreement (typically 5% of the purchase price, minus the $1,000 paid to bind the offer). This is deposited into the same escrow account mentioned above.
- Typically within 24 hours - many times, it is a shorter time period - all depends on the house. It is very important to respect the time and respond to the buyer. If your house is on the market, you have very likely run numbers in your head. Be prepared to counter offer in a timely fashion. In real estate, we abide by the rule that "time is of the essence".
- The buyer has a right to hire a licensed home inspector to inspect your home. You will want this to happen within 7-10 days as you are essentially taking your house off the market during this time period. After the home inspection, you will be negotiating repair items of significance from the Buyer's repair list. EVERY house has something that is "discovered" by a home inspector. Do not take this personally.
- The Purchase and Sale Agreement, fondly referred to as the P&S is the longer, more detailed version of the offer to purchase. The 2 page offer easily becomes 12-20 pages of legalese, drafted and negotiated by your Real Estate Attorney with the RE Attorney representing the buyer, the execution of this document and delivery of the check (5% of purchase price) are your permission to partially exhale. The SALE PENDING sign can go up. You may update your Facebook status and start packing.
- If your buyer is taking out a mortgage to purchase your home (this is most common), the date for which the buyer has to apply for his/her mortgage, as well as the date the buyer should obtain their mortgage commitment are included in the offer.
- Once the buyer obtains his/her mortgage commitment, you may continue to exhale.
- SOLD sign can go up.
- This is almost as important as the amount of the offer. This is the date that the buyer takes ownership of the house. You will have moved out the DAY BEFORE the closing date.
- This is the day that (if the deed is recorded before the registry of deeds closes), you will receive your proceeds from the sale.