Fabulous! We’ve gotten our first offer. We’ll review it carefully together. A few main points we want you to pay particular attention to in the contract are the:
Offer price: What price did you want for your home? What is the least amount you’d be willing to sell your home for? How does this compare?
Closing date: Typically in Chicago, closing takes place 30-45 days after contract acceptance. Sometimes buyers will ask for a longer closing date if they are doing a special loan program, need to give their landlord longer notice if they’re renting, need to sell their house, etc. If a buyer is paying 100% cash we can usually close faster than 30 days, but 30 days is generally the required minimum if the buyer is using a mortgage to buy the property.
Earnest money: How much earnest money is the buyer putting down? The typical amount is 5% – 10%. If the buyer is putting down less than that amount, it could mean that the buyer is doing a special loan program which requires a down payment of 0% – 5% down such as a VA loan or FHA loan. Or it could mean the buyer is a bit shaky financially. Ideally, we like to see buyers putting down at at least 5% for the earnest money.
Down payment: Depending on the buyer’s particular loan program the down payment could anywhere from 0% up. Personally, we like to see that the buyer is putting down at least 10% (20% is ideal) unless they are doing a special loan program like a VA or FHA loan. The more they are putting down the greater the chance that their loan receives approval.
Closing cost credits: Does the buyer want you to pay a portion of their closing costs? If so, how much? Please note the amount they are asking for comes off your net amount. So if a buyer is offering $500,000 for your home, but wants a $10,000 closing cost credit that means the offer is really only a $490,000 offer.
Home warranty: Did the buyer ask you to provide a home warranty? Depending on your home, this can cost you anywhere from $400 – $1,000 and is paid by you at the closing table and comes out of your net proceeds.
Personal property: Did the buyer ask for any of your personal property to be included in the contract such as that great lamp in the living room or the bar stools in your kitchen? You do NOT have to include these items if you wanted to take them with you to your next home.
Contingencies: Any contingencies the buyer has placed on the contract such as needing to sell their own home before they can close?
Are there any additional riders or addendum’s on the contract?
Want to review the contract in advance?
Click here to read the Chicago condo contract
Click here to read the Chicago single family home/townhouse contract
Click here to read the suburb contract
Once an offer comes in, we’ll discuss all of the above then you can decide whether you want to accept their offer, counter their offer or walk away from their offer. If we decide to counter, realize that some negotiations move fast and others move slow. We’ve had some negotiations take 2 hours while others have taken 2 weeks. It just depends on how quickly each party makes decisions, how quickly the Realtors relay that information, if everyone is in town and easily reachable, etc. Try to be patient.
