Jim Valentine: Responding to offers
When you receive an offer on your home, or a counter offer to your offer to purchase, there are some protocols that most people adhere to. Once in a while, agents or buyers/sellers decide to deviate. Sometimes it’s warranted, but quite often it is to insert confusion to the mix in order to tip things in their favor.
Offers and counter offers, henceforth referred to as offers, are submitted with a date/time certain within which to respond. Most of the time, it will be a couple of days, but it can be as short as a few hours or extended to a week. It depends on the circumstances of the buyers and sellers and the market that they are in. Buyers don’t want their offer “shopped,” disclosed to other buyers to incite competition. They must allow enough time, however, for the other party to review, assess and make a decision.
A buyer that likes more than one home might make an offer with a short fuse, or time to respond, so they have time to move on to the other home(s). We have a lot of out-of-town buyers in our region and some like to get the business done while they are in town. That is another reason for a short fuse. Some buyers use a short fuse to force an emotional decision. This isn’t a problem if there is merit to the offer, but this tactic is often used for the proverbial “low ball” offer. Offer low and take away the time for consideration and competition. This might benefit the seller circumstantially once in a while, but usually it is just part of a numbers game the buyer is playing to steal a property. They make a lot of this type of offer hoping that one sticks.
When you counter an offer, it is customary to give the same amount of time for a response as you were given in the original offer. For instance, if they gave you two days to respond, you give them two days to respond. It is OK to extend it if you know they are traveling or if the approval time occurs during a major holiday.
Sometimes offers aren’t signed in a timely manner by the originating customer. When that happens, the timeframe for acceptance can be tight. The agent can usually explain to the other agent what happened and work through it. We find it courteous to explain those circumstances so they know they weren’t being squeezed or played to make a decision uncomfortably fast. An addendum can be created extending the expiration date so when the other party signs the offer, it is a binding contract. You can also acknowledge the signed stale-dated offer to validate it.
Offers must have an expiration date to be legally valid. The expiration date can vary for a variety of reasons as touched on above. It is not, however, binding on the other party to respond in that time. This seems to surface once in a while, even among agents. They seem to think that you must respond in that time. Just because somebody makes an offer with a deadline specified by them doesn’t mean that you must absolutely work within that timeframe. If you want to accept it, then it is advisable to do so, but there is nothing that compels you to respond in that timeframe if you aren’t ready to or comfortable doing so. Life gets in the way sometimes — emergency room visits, work, etc. Sometimes you just can’t get to it. Advise your agent and everybody will adjust their expectations. Communicate if there is any delay.
Our advice: Treat the offer with the respect due. If it is 30 percent below asking and you have a fair market listing price then there is only so much to be expected by the offeror. Don’t ignore or insult them; they might be fishing and ready to use better bait to secure their catch. They might come up to a place where you can achieve a meeting of the minds. Time is of the essence, so be sure to respond as timely as possible.
Use the expiration time for efficiency, but don’t let expiration gamesmanship affect your perspective and ability to achieve your wants and needs. Work with your agent to accept, counter or reject appropriately.
When it comes to choosing professionals to assist you with your real estate needs… experience is priceless! Jim Valentine, RE/MAX Realty Affiliates, 775-781-3704. email@example.com