Once you have made a written offer as a first time home buyer, you may find that the hours suddenly feel a little longer than usual. Waiting for a seller to respond is the perfect way to slow the clock!
What can a first-time buyer (or any buyer, actually) expect on the day offers are presented to the seller?
You may remember a time when first time home buyers went to the house with their agent and waited outside. Agents would go inside to meet with the sellers and the listing agent to present your offer in person. Negotiations happened by sending the buyer’s agent back and forth between the kitchen table and the car, working out details until there was an agreement.
These days, with social distancing being the course of wisdom, most offers come in the form of an email. You will more than likely have your agent send your offer in with a written introduction, and maybe a letter from you. The Seller will go through your offer privately and get back to you.
If Yours is the Only Offer
You have found a place you really like, and yours is the only offer on the table. Today might be your day! You may get the chance to negotiate in a normal way at a relatively relaxed pace.
Since you must be informed of competing offers, you don’t have to wonder if yours is the only one.
As with all offers, whether in competition or not, you will need to indicate an “irrevocable” date and time. Once you submit your offer as a first time home buyer, you cannot revoke it before this time. This is an expiry, or drop-dead date. (Be aware that, during the irrevocable period, the seller is free to solicit and consider other offers, if they come in. You may want to keep it relatively short – just long enough for them to have time to sit and discuss it.)
The seller can handle an offer in any of the following ways:
- Accept is exactly as it is.
- Reject it by not responding.
- Ask you to change some details.
- Make a counter-offer.
If you do not receive an answer before your offer expires, you are no longer bound by it, and you’re free to move on to other things. (We know that’s not what you want, but it is your option.) You can also submit a new offer if yours expires.
If the seller accepts your offer as-is, congratulations! You are well on your way to owning your own home. We will talk about fulfilling conditions and firming up later.
When the seller wants to negotiate, whether verbally or by counter-offering, you will have to decide whether you are willing to compromise. On a formal counter-offer, there will be an irrevocable period during which the seller cannot revoke their offer to you. During this irrevocable period, the seller may not accept any other offers. You can take this time to think about what you’d like to do next.
When You Are In Competition
The dreaded bidding war is tough for a first time home buyer.
They’re almost unavoidable these days, but you can compete successfully with a little advance knowledge. For our purposes here, we will assume that you have decided on your strategy and you are knowingly participating in a multiple offer bidding process.
Expect to have your offer presented at a time of the seller’s choosing, and to have to wait for results of their decision. Typically, the longer you have to wait past the established offer presentation time, the less likely it is that they will be accepting your offer.
Sellers have the same four options laid out above. Most often, they will not make a written counter-offer, since that binds them to one buyer and puts the ball in that buyer’s court during the irrevocable period.
It is important to remember that a seller does not have to give you a chance to increase your offer.
If you are among the top two or three offers, they may ask you to improve by increasing the price or the deposit, or by removing some conditions. You must decide whether you are in a position to give them what they are asking for, or whether you are willing to remove conditions that you included to protect your own interests.
Your agent will receive a call, text, or email at some point to update them on the seller’s decision. Don’t be discouraged if they politely thank you for your offer and inform you that they have accepted a different one. You may have to try a few times before you succeed in getting an offer accepted.
The Bottom Line
Each time you experience an offer presentation, whether as a single offeror or as one of multiples, you gain some experience into the process. With patience, you will find the right home at the right price for you.
When you do, you will have some questions about what happens between your accepted offer and getting the keys to your new place!
Read more about that here.
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