A quick first offer is the dream of any seller and estate agent. In reality, though, it is not always that straightforward.
According to agents from Seeff, offers to purchase come in all shapes and sizes, and knowing when to accept is not always an obvious choice for sellers. For example, the highest offer is not always the best offer as it may come with contingencies and conditions, and the best offer is not always the highest price offer.
If a prospective purchaser offers to buy your house at the full asking price with minimal conditions attached, then it is almost a no-brainer that you would accept it. But it is seldom that straightforward. That said, in terms of assessing your asking price, research has shown that the first offer is often the best offer, but it might come with conditions.
Choosing an offer with the least potential for delays is always a better bet, but it depends on the circumstances. So, when should you then accept the offer? Seeff’s agents offer tips:
- If it is a cash offer with no contingencies attached, cash offers are typically not the highest. It may, however, mean that you can sell quickly and move on.
- If the offer is for the full asking price, or higher (which may sometimes be the case) and there are no challenging conditions or contingencies attached.
- If you need to sell in a hurry and the offer is not quite what you are looking for, then you could accept it in the interest of saving time and not risking that another offer may not be forthcoming.
- If finance is the only contingency and the buyer has been pre-approved for finance, then that provides a level of comfort that the deal will go through quite quickly.
- If the buyer is putting down a substantial deposit. That usually indicates that they are serious and are likely to secure the finance needed for the purchase.
- If there is work to be done on the house or it is a fixer-upper and the buyer is prepared to take it “as is” at an acceptable price, even if it is a bit lower than expected.
While a good offer should be close to your asking price, market conditions play a key role. If the market is booming and there are plenty of buyers competing for properties, then the seller can be choosier. If it is a buyer’s market, however, and there are fewer buyers and offers, then the seller would need to take care to not just dismiss any offer, especially if they need to sell.
Importantly though, in most instances, the offer to purchase will include a clause, known as the “72-hour clause” which enables the seller to continue marketing the property so that they do not miss out on a potentially better offer.
Should such a bona fide offer be made by a second buyer, then the seller must give the first buyer written notice that allows them 72 hours to either fulfil or remove the suspensive conditions and proceed with the purchase. Alternatively, the first buyer can elect not to proceed, and the seller is then free to accept the offer from the second buyer.
