For the literalists out there, I should clarify, you don’t have to wait any specific amount of time for the seller to respond to your offer. I’ve seen buyers submit an offer on a Tuesday morning at 9am, and withdraw their offer only hours later because they couldn’t wait any longer. That kind of approach isn’t going to make you any new friends, but then again, buying a home isn’t about making new friends for some people. I, on the other hand, love to make new friends… Will you “like” The Hill Group on Facebook?
How long should you expect to wait for the seller to respond to your offer?
Though real estate transactions are bound by many laws, there are few hard-and-fast rules when it comes to real estate negotiations. Here are two steps you can follow that may encourage the seller of, hopefully, your future home to respond to your offer quickly.
1. Work with your real estate agent to prepare a complete offer at a reasonable price.
There are few things that discourage a house seller from responding to an offer more than a low-ball price. Yes, I realize you’re trying to negotiate the best deal possible, but there won’t be a negotiation if your offer is so unreasonable that the seller decides not to respond to your offer at all. And, while the price is surely one of the most important aspects of your offer, be sure to address all of the other terms discussed on the purchase contract, too. By submitting a complete offer, without blanks and without causes for confusion, you’ll eliminate reasons for the seller to send you a counter offer.
Scenario 1: You submit an offer $7,000 below list price, without a a pre-approval letter from a lender, and Page 3 of the purchase contract is missing your initials. The seller sends you a counter offer back, increasing your price by $2,000, requesting to see a pre-approval letter within 24 hours, and identifying the line you forgot to initial.
Scenario 2: You submit an offer $7,000 below list price with all of the appropriate lines of the purchase contract initialed and a pre-approval letter raving about your remarkably low debt-to-income ratio. The seller, who has been on the market for 58 days, recognizes what an exemplary buyer you are and how foolish it would be to send you a counter offer over $2,000, so he accepts your offer outright.
You see the difference, don’t you? The seller in Scenario 1 had every reason to counter back. While he’s at it, he might as well try to get an extra $2,000 out of you. The seller in Scenario 2 didn’t want to risk losing his first reliable buyer. He felt compelled to accept your first offer.
2. Choose your offer’s expiration date and time carefully.
Give the seller enough time to discuss it with his partner, but not so much time that three more buyers have the opportunity to see the house and write offers on it. Here in Arizona, when dealing with traditional sales and short sales (not REO properties), the sweet spot is usually between 12 and 36 hours. If the seller is on a business trip to Poland the week you want to make an offer on his home, you may have to give him 36 hours just to find a fax machine…joke…kind of. Your REALTOR® can advise you on a case-by-case basis how much time to give to the seller, especially if he has already called and spoken with the listing agent about these kinds of details.
**SIDE NOTE: When dealing with a short sale, and choosing an expiration date for your offer, you are only requesting a response from the homeowner within that time frame. It may take weeks, or more likely, months longer for the homeowner’s lender to review and respond to your puchase offer. For more information on buying a short sale, please contact us.**
Now, how about offers on REO properties? How long should you expect to wait for the bank’s asset manager to respond to you?
Unfortunately, most banks don’t hold the same respect for “offer expiration dates” as the rest of us do. You can choose your offer’s expiration date and time as carefully as anyone, and most banks will still manage to miss it. Right now, we’re seeing banks respond to offers in an average of three to five business days. Remember, they don’t work weekends. Noooo…who does that?!
If you’ve been thinking about buying a home this year, and want to know two more steps to follow to encourage a fast response from home sellers, contact me today!