Negotiations: I Submitted My Offer, What's Next?

You've found you dream home, you sat down with your Realtor and decided on the details of the deal. The offer to purchase is typed, your agent presents your offer to the seller, and then its...rejected! Try to keep your emotions in check because it is rare for any first offer to be completely accepted. When the seller receives your offer they have three options:

(1) Acceptance - An accepted offer means the seller has agreed to all the terms and conditions, exactly as you requested in your offer to purchase. Congratulations! You are on your way to buying a home.

(2) Rejection - A rejected offer means the seller did not agree with the terms and conditions set forth in your offer to purchase.

(3) Counter offer - A counter offer means the seller agrees with some of the terms and conditions of your offer, but not all of them and makes a counter offer to you. The counter offer may change the price or closing date, or add or remove conditions.

Once you have received a counter offer, you have three choices: accept the new terms and conditions, reject them outright and look for another house, or work with the seller to establish mutually agreeable terms. Unless the seller is being extremely unreasonable, you will likely choose to work with them.

When negotiating, remember to:

Choose your battles wisely - do you really want to jeopardize the whole sale by negotiation over the inclusion of relatively insignificant items like drapery or a rug? Save your energy for issues that matter most.

Keep it real - The terms of the purchase have a much greater chance of being accepted if your offer is grounded in real market conditions, and not in the fantasy of getting something for nothing. Remember, the seller may be considering other offers. Bid too low and you risk losing the house to another purchaser. Your Realtor can help you determine an appropriate to price to offer based on their knowledge of the local housing market.

"Be a lover, not a fighter" - Negotiating back and forth can be stressful but being argumentative and negative when you hear something you don't like won't get you any closer to owning the home. Being polite and collaborative in any dealings with the seller or their Realtor can take you farther than you may think. Let the seller know you hear and understand their issues but be respectful when disagreeing with or rejecting terms. Try to communicate your own wishes clearly and be patient and helpful when misunderstandings come up.

Know when to stand your ground, and when to give in - Prepare for negotiations ahead of time by figuring out which terms of the deal you can compromise on, and which terms are deal-breaking must-haves. Make sure your priorities are communicated clearly. And remember, negotiation is all about give and take, so expect to make some concessions. By establishing your position in advance, you'll be able to handle a little of the give painlessly and with certainty.

Know when to walk away - It is unlikely that you and the seller won't be able to come to mutually acceptable terms, but you have to prepare yourself in case that happens. If it becomes clear that the seller will never budge on terms that are important to you, its time to move on. Sometimes just being prepared to walk away is what it takes to make a stubborn seller think twice about their firm position.

830 Rowntree Dairy Rd. #17 . Woodbridge . ON . L4L 5V3 Phone. 416.749.8486  Fax. 905.850.5525

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