A lot can happen from the offer to mutual acceptance. Today I want to share the tip of the iceberg on that process from the time of the offer to mutual acceptance. Entire treatises have been written on this subject and the nuances involved through each step, so bear with me as I try to compress thousands of pages (and 40 years of my own experience) into a 500 word article. I’ve had some complex negotiations, and some clients want to learn how things work while it is happening.
Offer to Mutual Acceptance
Drafting an offer on your next home involves getting the offering price right and the terms right. Regardless of the listing price, you need to know true fair market value (FMV), and your offering price should be based on the FMV and the current inventory, and of course, supply and demand. And if you don’t know how to construct the best terms that a seller will be able to accept in the local market, you may never reach an agreement.
The process goes like this: 1.) the offer, 2.) the seller’s response, which could be acceptance, rejection, or a counteroffer, and if the seller counters, 3.) the buyer’s response could be acceptance of the seller’s counteroffer, or a counter to the counter.
If a seller counters, he has rejected the offer, and is making a new offer to the buyer. That means the price and terms, and all the deadlines in the original offer are dead and not part of the seller’s counteroffer. If the buyer makes a counteroffer to the seller’s counteroffer, the buyer is rejecting the seller’s counter, and putting a new offer on the table.
The terms of a buyer’s offer may include contingencies, such as a financing contingency, a home inspection contingency, and maybe even a contingency on the sale or close of the buyer’s own home.
There are a variety of specific terms under each of these scenarios. There is the potential of a “bump clause” in which the seller is entitled to accept a second offer and the buyer has to match the terms of the second offer or their offer is bumped and terminated. There are potential backup offers, and the buyer will have a number of options regarding his due diligence from the time of mutual acceptance to closing
What I’ve learned is that some of my buyer clients trust me to handle the contract language and processes from the offer to mutual acceptance, other clients have some questions during the process, and still other clients want to know every single detail and are full of questions.
As a buyer, you don’t need to try to learn everything a professional has learned over a period of decades, but I do recommend that you carefully select your Realtor, because if your Realtor is going to do a good job for you and get you to mutual acceptance and beyond, your Realtor needs to be darn good. Just because someone has a real estate license, or just because they’ve been a Realtor for a while does not guarantee they have the requisite knowledge and experience. [Read more articles on various aspects of Negotiating.] You can also learn more about specific steps of the process by using the drop down menu at the top of this blog where you’ll find thousands of articles written specifically for buyers by a Sequim Realtor and Attorney (Ret.).
The process from the offer to mutual acceptance is full of traps for the unwary, and it is a complex process. There’s a lot at stake, mostly your money and the rest of your life, so I recommend you make sure you get it right.
Possibly Related Posts:
- Why Negotiating is Not for Amateurs
- Negotiating Mistakes Kill Deals
- The Danger of Unmanaged Emotions in Negotiating
- In Real Estate Knowledge is Power
- What Makes Negotiating Hard?