Savvy Sellers Know: Offer Terms Matter

Receiving an offer is an exciting milestone for a home seller, but it’s important to understand that it’s more than just the price a buyer is willing to pay. An offer, once signed and delivered, becomes a contract that outlines the legal obligations of both parties (including the obligation to proceed with the sale if certain agreed-upon contingencies are met).

Offers contain the contingencies (inspections, appraisal, etc.), information about the buyer’s financing (cash or loan), loan type, proposed closing date, earnest money deposit, and sometimes requests for personal property like appliances. Contract terms can affect how the transaction progresses and the likelihood of reaching the closing table successfully.

As a seller, you have three options when you receive an offer: accept it, reject it, or make a counteroffer to negotiate the price and/or terms. Your real estate agent will help you analyze the offer, evaluate the terms, identify red flags, assess contract deadlines, and ensure the buyer is pre-approved for a loan. This will help you understand how each term may impact your bottom line, schedule, and peace of mind during the sale.

Because terms can make or break a deal, the best offer isn’t always the highest one. A well-qualified buyer with fewer contingencies, a reputable mortgage lender, flexible closing date, and large down payment may ultimately offer a smoother (and even cheaper!) path to closing than a slightly higher offer with more contingencies and weaker terms.

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THE TAKEAWAY

When reviewing an offer on your home, it’s important to look beyond the price and consider the full terms, including contingencies, financing, and timelines. The strongest offer is often the one that aligns best with your goals and provides the most reliable path to closing.