How To Navigate Offers and Negotiations When Selling Your Home

Picture this: you take all the right steps to get your home in pristine condition to list it for sale. You follow my 3 step proven process that involves preparing, presenting, and perfecting.

Once it’s listed at a fair market price, we strategically schedule showings and open houses (if needed) in order to get your home in front of the right people at the right time.

In record time, offers start flooding in! WAHOO. 🥳 This is exactly what you wanted. You’re one step closer to selling your home and making your next move in real estate. 

But what do you do now? How do you handle the offers that you receive? What about negotiating?

This is one of the most crucial parts of the selling process and you want to make sure that you navigate this time correctly so that you end with the best result. 

To help you achieve just that, in this blog post, you’ll learn what the offer and negotiation process looks like from the seller’s point of view so you know exactly what to expect along the way.

The First Thing To Do When You Receive An Offer On Your Home

When you’re selling your home, receiving an offer is SUCH an exciting feeling! It instantly feels promising and often makes sellers feel super confident that their transaction will move quickly. 

While it’s true that receiving offers on your home is a good sign, my best advice when working with clients who are selling their home is to not get their hopes up quiteeee yet. 

When we receive offers on your home, we need to do a little investigation first in order to see if the offer is even something you want to entertain. 

For example, if the buyer offers wayyyy under asking and has outlined a ton of contingencies in their offer, there’s a chance it’s not an offer that will be at the top of your list for consideration. 

This is why it’s crucial that the FIRST step after receiving an offer is to carefully review the terms and conditions outlined in the offer letter. Your real estate agent will typically go through this paperwork with you and help you fully understand exactly what the offer entails. 

You don’t want to rush this or breeze over it! It’s incredibly important to view the offered price, proposed closing date, contingencies, and any additional terms the buyer may have included, so that your agent can help craft an appropriate response and help you decide how to strategically proceed!

How To Choose The Right Offer As The Seller

So, what do you do if the offer isn’t exactly what you were hoping for? My answer: it depends!

Let me explain…

If you receive a ton of offers on your home, first you’ll do a little happy dance because that means your home is competitive, which is a GREAT thing. 💃🏻

Next, you’ll want to go through each of the offers very carefully and start ranking your top picks. 

This often includes examining the offer price, contingencies (if any), closing timeline, buyer letters, etc. in order for you to choose the offers that stand out the most. During this process, your real estate agent will also help guide you and give their suggestions when needed. 

One thing to note here is that it’s a common misconception that the highest offer is the one that always wins. In my experience, however, high offers can sometimes be beat out based on other factors. 

For example, an all-cash offer with a quick closing might be more attractive than a higher offer that's contingent on the sale of the buyer's current home.

Other times as the seller, you might be in a situation where you’re in a hurry to sell due to a job relocation, for example, and may prioritize a quick and hassle-free closing over getting the highest possible offer.

The point here is that every seller’s circumstances are different and YOUR specific scenario will heavily influence the offers that stand out to you as the most appealing!

On the other hand, if you only receive one or two offers on your home and none of them are stand out offers that you’re super excited about, it’s time to negotiate. 

And I know what you might be thinking… negotiate?! That sounds intense and scary. But trust me, it’s a totally normal and common thing in the real estate world. 

This is where working with a local, trusted real estate agent is going to come in handy because this is what they are trained to do. You shouldn’t be left to come up with negotiation tactics on your own. Instead, you want to have someone on your side that has done this before so you can do it correctly and strategically! 

4 Negotiation Strategies You Can Use As A Seller

When it’s time to negotiate, there are a few ways we can go about it based on your specific circumstances. 

1. Counter offer WITH an expiration date

In real estate, it’s rare that a buyer will come to you with an offer that’s at or over your list price.

Now, I want to caveat that by saying in the last few months due to the state of the market, we are seeing more over-asking offers, but generally as a seller you don’t want to expect that. 

Instead, you can expect for a buyer to offer below asking because they expect for you to negotiate!

As the seller, this is where your counter offer can come in. Most sellers will create a counter offer that’s higher than the buyer’s original offer, but still below list price. Other times, sellers will say that the list price is low as they’ll go and they’ll counter offer with that. 

The key with ANY counter offers, however, is that you provide the potential buyer with an expiration date in order to create some urgency so they feel a little bit of pressure to act quickly.

The counter offer strategy will show which sellers are serious and which aren’t worth negotiating with any further, allowing you as the seller to spend more of your time on the right people!

2. Reject the offer entirely

At times, it may make sense as the seller to reject an offer entirely. With this strategy, you’re essentially telling the potential buyer that you believe your property is worth what you’re asking for and you aren’t willing to negotiate that. 

In an instance like this, the buyer is still able to submit another offer, but one huge benefit to this strategy as opposed to counter offering is that you’re not locked into a negotiation with them and you can ethically accept a higher or better offer if it comes along!

Again, this will show you who is serious and who isn’t! 

3. Create a bidding war

The term “bidding war” is something you may have heard lately if you’ve been in tune with the real estate market in the last year or so. 

A bidding war refers to a situation in which multiple prospective buyers submit competing offers on a property, driving up the price in an attempt to outbid one another. Bidding wars typically occur when there is high demand for a property and limited inventory available for sale, leading to increased competition among buyers.

That’s why this strategy has been so prominent recently! With lower inventory, people are feeling more competitive and it can play to your advantage as a seller. 

Here’s how a bidding war works:

Each buyer will submit their offer, often with terms and conditions that they believe will make their offer more attractive to you as the seller. These terms may include the offer price, contingencies, proposed closing timeline, and any additional concessions or incentives offered by the buyer.

As competing offers come in, you as the seller have the opportunity to review each one and choose the one that best meets your needs and financial goals. From there, you can then work with your real estate agent to determine the best way to proceed.

4. Agree to pay closings costs with the contingency of a higher purchase price

Lastly, a common strategy that sellers can use during negotiation is to agree to pay closing costs for the buyer WITH the contingency that the purchase price is higher.

The reason this works is because most buyers are tapped for cash after their down payment, moving expenses, and closing costs are considered. 

Although the closing expenses are typically the buyer’s responsibility, offering to pay the closing costs for them is often very appealing, even if you only agree to do so at a higher purchase price.

The key for this strategy to work, however, is that you make sure the purchase price you set with closing costs considered align with your home's appraisal or else the buyer's lender likely won't approve an overpriced sale, so you'll have to lower the price later and lose money you didn't intend to.

Ready To Start The Home Selling Process?

Overall, handling offers and negotiations in a strategic way when selling your home is going to be one of the major things that makes sure you come out on top!

This is why you always want to partner with a trusted, local realtor to help you do it RIGHT.

Your real estate agent is the person that works with you from start to finish to make this process feel way less overwhelming and get you to the ultimate outcome that you truly want!

So, whaddya say? Are you ready to begin the home selling process?

If you’re local to Billings, CLICK HERE to get started and I’ll help you get started on the right foot. 

And if you aren’t local to Billings, good news for you – I know people. 😏

Connect here and I’ll get you in touch with a trusted agent in your area to start the home selling process with ease!