The search is over and you have finally found the house that is perfect for you. With the help of your agent, you prepare an offer while keeping your fingers crossed. By now, you probably feel anxious and excited at the same time. To help you feel mentally prepared, here’s a list of the four most possible things that can happen after you send an offer:
- You receive a counteroffer
- Your offer is rejected
- There is no response at all
- The seller accepts your offer
Scenario #1. Seller Makes A Counter Offer
There are instances when the seller makes a counteroffer after you send your initial offer. This means that the seller is willing to consider your offer with some modifications.
When the seller counters your offer, the seller usually comes back to you with a price that is slightly higher than your initial offer. If the buyer is not satisfied with the counteroffer he or she can reply with a new offer.
It usually takes several counteroffers between the buyer and seller before both parties find the best price and terms. If both parties can’t agree on the terms, one party usually stops communicating and walks away from the deal.
Here are some of the most common questions buyers have about counteroffers.
Why Did The Seller Counter My Offer?
Receiving a counteroffer is one of the most common things that can happen after you send an offer. Sellers have different reasons for sending a counteroffer. But it’s usually because the seller wants certain amendments or changes in the offer.
The seller might want to adjust contingency timelines or change the closing date, for instance. Sometimes, sellers don’t want to pay certain fees so they add those fees to the selling price. This is why they want to sell the property for a higher price. In some cases, the seller requests a higher earnest money deposit.
What Is The Average Number Of Counteroffers During Offer Negotiations?
There is actually no limit on the number of counteroffers between the buyer and seller. When a seller makes a counteroffer after you send an offer, you can counter that with another counteroffer.
Does it sound confusing?
Like what we mentioned earlier, this back and forth communication goes on until both parties are satisfied. Here’s a quick scenario of how the exchange could happen between you and the seller.
Let’s say a property was listed at $515,000. Then, a buyer submitted an offer for $500,000. Again, there are different things that can happen after you send an offer. If you receive a counteroffer, the exchange can go like this:
Seller counter offer 1:
Counters offer to $512,000. Refrigerator included without warranty.
Buyer counter offer 1:
Counters sale price to $505,000. Refrigerator included without warranty.
Seller counter offer 2:
Counters offer price to $509,900. Refrigerator excluded from sale.
Buyer counter offer 2:
Counters sale price to $507,500. Refrigerator excluded from sale.
After the buyer’s second counteroffer, the seller finally agrees to an offer price of $507,500 with the refrigerator excluded from sale.
The buyer then accepts the last counter ending with a $507,500 sale price with some personal property remaining with the seller.
What Do I Need To Know About Accepting Counteroffers?
As a buyer, you can just accept a counteroffer after you send an offer if it still falls within your budget. What you need to know is that counteroffers usually include expiration dates. While you are deciding whether to go through with the counteroffer or not, the seller can still accept other offers.
The seller might withdraw a counteroffer if he or she finds a buyer offering something that is more suitable to his or her needs. In this case, the seller then accepts the second buyer’s offer.
When Is A Counter Offer Rejected?
A seller can decide not to respond to an offer or counteroffer since most of these specify an expiration date. In other cases, after you send an offer or a counteroffer, the listing agent can send a rejection email stating that the seller will not respond since the deal is not acceptable.
Scenario #2. The Offer Is Rejected
Though sellers are not required to formalize their rejection in writing, there are procedures on how to reject an offer. The bottom part of most purchase contracts, for instance, have an area for sellers to note rejection. Sellers can either do that or write “rejected” on the face of the contract together with his or her initials as well as the date.
Among the many things that can happen after you send an offer includes outright rejection. When your offer is rejected, the best advice we can give you is just to move on. There are different things that can happen after you send an offer. It is important to hope for the best, but also prepare for any unfavorable response. No matter how great you think your offer was, it really boils down to the motivation of the seller.
Below are some ways that can help you get accepted after you send an offer:
Provide the Best Offer you can give
There are times when the buyer doesn’t offer the maximum amount he or she can actually afford. I mean, it is good to leave some room for negotiations after you send an offer. But if you see that sellers are not responding favorably, then maybe you can cut to the chase. You can offer something that will not make them think twice and would push them to accept your offer immediately.
Believe that there is a Better Home out there for you
We know that buying a home can give you an emotional roller coaster ride. More so, if you are a first-time homebuyer. There are many benefits for a first-time homebuyer and that includes the experiences and lessons you learn in the process.
After you send an offer and it is rejected, you might have trouble moving on, especially if you really liked a certain home. But just charge it to experience and try to use what you learned in the next offer you make. Once you finally close on a home, you’ll realize that it’s a good thing you didn’t end up with that first property. Believe that there is a great house out there that is meant for you.
Accept that Sellers are Motivated by Different things
Sellers have different personal situations as well as motivations for selling a home. Don’t get caught up on figuring out why a certain seller rejected your offer. Just focus on your next search. It won’t hurt if you try to ask the agents you’re working with for some background information on the sellers. This might help you with your next offer.
Scenario #3. There Is No Response From The Seller
Don’t worry! Not receiving any response from the seller is also one of the most common things that can happen after you send an offer.
It is not unethical or illegal if sellers choose to do nothing after you send an offer. This is also true for you, as a buyer, when you receive a counter offer.
Take note that most offers have an expiration date. Say the seller accepts your offer but does so after the expiration date. Then, you would need to place a countersignature to reinstate the validity of the contract. Sometimes, sellers choose not to respond to an offer because they find the offer to be unreasonably low.
Scenario #4. Your Offer Gets Accepted
If the seller accepts your offer, you’re closer to owning your dream home. Expect the next few weeks to be hectic since you would have a lot of work to do. Fortunately, you can use the help of your real estate agent during this period.
When your offer gets accepted, the status of the property listing could be any of the following.
We say that a home is “under contract” when a buyer presented an offer and the seller accepted the said offer. However, the sale has not been finalized yet. Here are the most common reasons why the actual sale is yet to happen.
- The home inspection has not been completed yet
- Buyer is still trying to secure financing
- The buyer, the seller, or both parties have not fulfilled the conditions of the sale
When the buyer and seller complete proceeds with the actual sale, the home’s status should be sold.
If a property that you really like happens to be under contract, do not lose hope. There are times when one party fails to meet some of the conditions or obligations within the given timeline. Hence, the sale may be called off. This is the reason why homes that are under contract continue to be marketed. Sellers may welcome backup offers when there’s a possibility that the contract will fall through.
A contingent sale means that the seller already accepted an offer although there are conditions that should be satisfied. The property with a Contingent Sale status continues to be on the active listing as there is still a possibility that the contract will fall through. This happens when the contingencies in the purchase agreement are not satisfied.
Some sellers agree to show properties with a contingent sale status. In fact, there are sellers who are willing to accept a better offer.
On the brighter side, if everything goes smoothly, then the contingent deal gets upgraded to pending status.
A property is marked as “pending” when the seller has accepted the offer with all contingencies adequately addressed or have been waived. Homes that are “pending” are excluded from active listings. The next step is the closing stage where all the legal work will be processed. Closing can happen in a few days or may take a few weeks. But at this stage, it’s almost a done deal.
Is it possible to make an offer on a home with a Contingent Sale or a Sale Pending status?
You can actually make an offer on a home irrespective of its status. However, sending an offer to the seller who already accepted another offer will not be easy especially if the sale has a pending status.
That is why it is essential that you plan out a good strategy with your agent so you’ll get a favorable response after you send an offer.
Of course, it’s always better to consult your real estate agent and seek his or her advice. Your agent can provide more insight on how to proceed. Moreover, real estate agents know how to handle complex deals.
What’s The Next Step After You Send An Offer And The Seller Accepts It?
The next steps may vary from state to state but they should not be too different. Your to-do list after receiving the seller’s positive response would most likely include the following.
Move Forward With Your Financing
We’re hoping that you already got a pre-qualification for a mortgage or pre-approval at this point. If not, you have to move quickly.
After the seller accepts your offer, you should get in touch with your mortgage broker or lender to comply with the paperwork required to finalize your loan application. If you already have a pre-approval, the lender already checked your creditworthiness so the process would take less time.
You should inform your lender and finalize your loan application. During the process, the lender will request a licensed appraiser to appraise the property. Your loan amount may depend on the appraised value of the property.
Time For Some Home Inspection
Most lenders do not require home inspections but it’s better to do one. Some buyers prefer to do the inspection before sending an offer. However, inspections are usually done after the seller accepts your offer and you sign the real estate purchase agreement. Doing an inspection is your right as a buyer and it’s advantageous to you since you’ll know the true state of the property.
If there are issues with the property which will require repairs, you can ask the seller to do some repairs on the property. You can also renegotiate the offer or come up with a compromise to make up for the issue.
Secure Your Homeowners Insurance
Most lenders will require you to secure homeowners insurance prior to loan approval. You can look around for insurance policies that best suit your needs. Do not be afraid to negotiate and haggle for rates. There are many ways to reduce your insurance premium. For instance, you can save some money is by tying up your homeowner’s insurance with your auto insurance.
Focus On The Closing Date
While your lender is busy evaluating your loan application, you might want to think about hiring a real estate attorney after you send an offer. They can help you with the closing documents and with all the legal matters. In certain states, you are actually required to have one.
Expect to deal with paperwork, tons of it, during the period leading to the closing day. Your real estate agent, the lender, your lawyer, and the title agent might ask for certain documents from time to time.
Aside from complying with all requirements promptly, you should also prepare your down payment. You have to be financially prepared and emotionally ready to let go of your down payment budget after you send an offer.
While waiting for your loan approval, be prudent with your spending. This is not the time to make big purchases which could alter your credit ratings. Once your mortgage lender gives you the green light and everything checks out on the title search, appraisal, and inspection, you can move towards closing.
Unexpected Things That Can Happen After You Send An Offer And Sign The Purchase Agreement
You can never be in control of everything. Just when you’re ready to push through with everything, something surprising happens. Here are some questions you may have if you encounter difficulties after you get a property under contract.
Is It Possible To Back Out On An Offer?
Yes, but there could be consequences. There are certain situations when either the buyer or the seller decides to back out on an offer. It may be because of cold feet or there might be certain circumstances preventing them from pushing through with the home buying process.
What Happens When A Buyer Wants To Withdraw An Offer Which Has Been Accepted?
There are several things that can happen after you send an offer. There are times when buyers feel the need to withdraw an offer. Different states actually follow different rules when it comes to the withdrawal of offers. Certain states like California considers an offer binding to both parties after the seller signs everything or a buyer initials a counter offer. When a buyer withdraws, then legal actions might be taken by the seller.
However, in states like New York or New Jersey, an offer may just be called a purchase proposal and is not considered binding. You are not bound to purchase the home even after a formal written offer has been accepted by the seller.
Hence, in certain states, you are free to withdraw anytime should you change your mind after you send an offer. There will be no legal actions taken against you at this point. But if you back out after signing a real estate purchase agreement, which is a binding contract, there could be consequences.
What Happens When A Buyer Wants To Back Out On A Sales Contract Before Closing?
It is possible for a buyer to back out of a sales contract prior to closing. However, this comes with certain consequences. Buyers usually place an earnest money deposit, which amounts somewhere between 1 to 10% of the sale price. Backing out of the sale at this stage may mean forfeiting your earnest money deposit. This is subject to the terms and contingencies listed in the real estate purchase agreement.
Due to these consequences, it is advisable to sign the purchase agreement after you fully consider all contingencies and accept the responsibilities of buying a house.
What Are Some Of The Reasons Why A Seller Would Back Out After Accepting An Offer?
There are instances when sellers back out after accepting your offer. These reasons may include the following.
Most sellers back out of a sale when the property’s appraised value is too low. The price that the buyer and seller have agreed upon may not be the sale as the loan amount approved by a mortgage lender.
A low appraisal means that the valuation of the property is lower than the offer price. If your lender appraisal is too low, the buyer has to make up for the difference. In some cases, buyers are not able or willing to do so, forcing the seller to pull out.
Difficulty in Finding a House
Most sellers will start looking for a new home after you send an offer. But on certain occasions, they find it hard to find a property that meets their needs or is within their budget.
If the contract is contingent on the seller finding a new home, the seller can back out without a hitch. However, if such contingency has not been included then the seller may be liable for breach of contract.
UnFORESEEN Life Events
Changes in the seller’s life situation can also affect the home buying process. Some things that can happen after you send an offer may cause the deal to fall through. Loss of a job, changes in job opportunities or an unexpected family event may cause the seller to reconsider the sale of the property.
Most buyers are understanding and sympathetic to the seller’s situation even if the offer has been accepted. Nonetheless, the buyer may request for reimbursement for certain expenses like appraisal fees and home inspection.
What Happens When The Seller Wants To Back Out Before Closing?
Once a real estate purchase agreement has been signed, it becomes legally binding. If a seller breaks his or her end of the deal then the buyer may sue for damages due to breach of contract.
When sellers back out, the buyer gets a refund for the earnest money deposit. It would be best for the seller to hire an attorney to make sure that all bases are covered should he or she encounter emergencies or a sudden change of heart.
Closing On A House
The closing stage starts after you send an offer, and it has finally been accepted. We know it wasn’t easy to get to this point. At this stage, you are close to being a homeowner but the keys to that dream home are not yours for the taking. In a way, the transaction is still a contingent sale.
The period between the offer acceptance and the closing date is the time to accomplish all the needed paperwork. This gives you and your agent adequate time to work with the lender and title agency in order to carry out the finances and title documentation.
The time after you send an offer and receive a positive reply would be eventful. There are even times when the closing date is pushed back for a few weeks to give your team enough time to complete all the arrangements. Sometimes, you have no choice but to wait because of the closing disclosure.
What About The Cost Of Closing?
There are certain fees that you need to pay when you finalize the purchase of a home. And, you need to allot money for these closing costs. Closing costs may amount to 3 to 4% of the purchase price. So if the cost of the home is $400,000, then you might need to shell out something between $12,000 to $16,000 for closing costs.
Closing costs often include the following expenditures:
- Home inspection
- Homeowners insurance
- Appraisal fee
- Attorney expenses
- Credit report changes
- Title searches
What Is The Usual Timeline When Closing On A House?
The average waiting time after you send an offer is usually 41 days. You should exercise patience during the closing process. Most buyers encounter delays that could push back the closing date. Common delays are related to financing issues when buyers incur more debt along the processing period or when buyers are not honest with all their payment obligations.
The key here is to be upfront with all your current finances and try to keep a good credit standing before you close the deal.
Consider All The Things That Can Happen After You Send An Offer
There are so many things that can happen after you send an offer. It can go in the direction you are hoping for. It’s possible for everything to be smooth sailing from the time your offer gets accepted. Sometimes, things get a little more exciting – negotiations with the seller can go back and forth until you find the best deal. In some cases, buyers get rejected.
With all these possibilities, you should prepare yourself mentally after you send an offer. Whatever the outcome could be, remember that all your struggles will eventually lead to owning your dream home.