Evaluating a Real Estate Offer
Every home sellers dream is to receive offers to buy the property. The more offers the buyer receives the better. When an offer comes in, you can accept it exactly as it stands, refuse it (seldom a useful response), or make a counter-offer to the buyers, with the changes you want.
In evaluating a purchase offer, as the seller you should estimate the amount of cash you'll walk away with when the transaction is complete. This is referred to as "Calculating Your Net Proceeds". For example, when you're presented with two offers at once, you may discover you're better off accepting the one with the lower sale price, if the other asks you to pay points to the buyer's lending institution.
Calculating Your Net Proceeds
Once you have a specific proposal before you, calculating net proceeds becomes simple. From the proposed purchase price you can subtract:
Payoff amount on present mortgage
Any other liens (equity loan, judgments)
Broker's commission
Legal costs of selling (attorney, escrow agent)
Transfer taxes
Unpaid property taxes and water bills
If required by the contract: cost of survey, termite inspection, buyer's closing costs, repairs, etc.
Your present mortgage lender may maintain an escrow account into which you deposit money to be used for property tax bills and homeowners insurance premiums. In that case, remember that you will receive a refund of money left in that account, which will add to your proceeds.
Making a Real Estate Counter Offer
When you receive a purchase offer from a would-be buyer, remember that unless you accept it exactly as it stands, unconditionally, the buyer will be free to walk away. Any change you make in a counter-offer puts you at risk of losing that chance to sell.
Who pays for what items is often determined by local custom. You can, however, arrive at any agreement you and the buyers want about who pays for:
Termite inspection
Survey
Buyer's closing costs
Points to the buyer's lender
Buyer's broker
Repairs required by the lender
Home Protection Policy
You may feel some of these costs are none of your business, but many buyers, particularly first-timers, are short of cash. Helping them may be the best way to get your home sold.
