Once you and the buyer agreed to a price on the house you're selling, you probably thought all the days of offers and counteroffers were over, right?
Wrong. Now you're in the phase where contingencies come into play. Here's what to expect:
1. Realize that you haven't actually sold your home yet. You only have an offer and an acceptance. Your buyer is (almost assuredly) going to make the sale contingent on the evaluation of a home inspector before the agreement is final.
2. Your buyer will put down somewhere between a few hundred and a few thousand dollars of earnest money on the house. This is a show of sincerity in order to get you to take the house off the market while the buyer gets a home inspection. If the buyer cancels the sale without justification, you get to keep the earnest money for your inconvenience.
3. Keep in mind, there's no such thing as a perfect home and it is the home inspector's job to find both big and small problems. Using the report from the home inspector, your buyer will submit a new list of contingencies, or demands, that he or she wants in order to complete the sale. It will likely include:
- A list of any major repairs that the buyer thinks that you should make -- which could be anything from a new furnace to a new roof
- A list of any minor repairs that the buyer thinks that you should make -- which could be anything from tightening a stair rail to cleaning the air ducts
4. The buyer is going to ask for everything he or she wants -- which is probably almost anything that the home inspector noted needed done. However, you don't have to agree to it. You essentially send back a new counteroffer, listing what you will fix or what alternative terms you'll accept. This goes on until you either finally have a deal or agree that one can't be reached.
Real estate transactions are scary when you're new to the process. A real estate law firm can do most of the negotiations for you -- which can keep you from agreeing to too much for fear of losing the sale (when the market is in your favor) or losing the sale (when the market isn't in your favor).
Source: WHY Realty, "Contingencies in the Offer," accessed Aug. 30, 2017