Experience. Honesty. Results.
Questions? (530) 343-2959

Search Homes

How to Prepare Your Home for Sale

How to Deal with Buyers' Offers

If you've priced and marketed your home effectively, you'll soon begin to receive offers, also known as bids, from buyers interested in your home. Though buyers and sellers often discuss the basic terms of a deal (through their agents), by law, all formal offers must be in writing.

The Typical Terms of an Offer

An offer contains more than just the price the potential buyer is willing to pay. Though terms vary, most offers cover the following items (at the least): Offer price: The price the buyer is offering to pay.

  • Financing source: The buyer's financing, usually from a bank or mortgage company. In some cases, a seller offers to loan the buyer money to buy the home. This arrangement is known as seller financing.
  • Contingencies: Conditions that must be met in order for the transaction to close, such as the sale of the buyer's current home, the buyer's ability to secure a mortgage, and the outcome of the home inspection.
  • Inclusions and exclusions: A list of removable items in the home, such as window treatments and appliances, that the deal includes.
  • Earnest money: A cash deposit that the buyer makes to solidify his or her commitment to the deal. The offer will detail how large the deposit is, when it will be made, how the money will be held until the deal closes, and what will happen in the event that the deal falls through. Earnest money is usually equal to 1% of the sale price, but amounts vary.
  • Timing: Deadlines for the remaining steps in the transaction, such as the date of closing and the buyer's move-in date.

How to Evaluate Offers

Keep the following guidelines in mind when evaluating the offers you receive:

  • Price: Though important, price isn't the only factor you should consider. If you're selling into a buyer's market, you'll likely have to accept selling prices that are below your asking price. In a seller's market, you can feel more confident sticking to your asking price and waiting for a buyer who agrees to pay it. Keep in mind that accepting a lower price usually lets you remain firm on other terms that matter to you, such as the timing of the closing or the contingencies of the deal.
  • The buyer's finances: Sellers should favor buyers who have been preapproved, not just prequalified, for a mortgage that's at least as large as the selling price minus the down payment that the seller intends to pay. You should also favor buyers who intend to pay at least a 20% down payment, though anything above 10% is acceptable. The combination of preapproval and a significant down payment (in cash) makes it more likely that the buyer will be able to complete the deal.

How to Respond to Offers

The most effective way to respond to an offer depends on the number of offers on the table.

  • If you have only one offer: You can accept or reject it outright, or make a counteroffer, which is by far the most common seller response. Usually, sellers make formal, written counteroffers through their agents. In the counteroffer, the seller provides a version of the terms of the buyer's offer that he or she considers acceptable. Most counteroffers address both the price and the other terms of the deal.
  • If you have multiple offers: You should never negotiate with several buyers simultaneously. It's best to deal only with the buyer who offers the most compelling combination of terms and financial stability. You might also disclose the terms of your best offer to all your bidders and set a deadline by which they can match or beat that offer.

How to Negotiate with Buyers

The best negotiations end with both sides believing that they got a good deal. Your negotiating strategy will depend on several personal and economic factors, such as the state of the real estate market and your eagerness to sell. The following dos and don'ts should help you in any type of home-negotiation situation.


  • Stick to the facts: The facts of the deal-such as the condition of your home, the state of the market, and the buyer's finances-should guide your negotiations.
  • Use your agent: Avoid speaking with the buyer or his or her agent. Convey your wishes candidly to your agent so he or she can represent your interests. Your agent should handle the negotiations, not you.
  • Give to get: By holding a hard line early, you can make it seem as if you care about certain terms that don't really mean that much to you. Then you can let the buyer have his or her way on those terms in exchange for other concessions that you do care about.
  • Go halfway: If there's a number or date that you and the buyer can't agree on, offer to go exactly halfway.
  • Focus on issues you can solve: If in each round of negotiation you focus on what you can solve rather than what you can't, you can build up momentum and goodwill and make big issues seem smaller.
  • Get it in writing: Never consider an "oral agreement" definitive. Instead, maintain a written record, signed by both parties, of all counteroffers and revisions.


  • Focus on small details: If you have a compelling offer, don't jeopardize it by focusing on terms such as whether you get to keep your window treatments.
  • Dismiss offers out of hand: Read and consider all offers before rejecting them outright. Sellers often balk at their first offer, though studies have shown that the first offer is often the best-unless the home has been on the market for only a few days in a seller's market.
  • Be afraid to walk: Enter into a deal only if it feels fair. If your buyer or the terms of the deal feel in any way unsatisfactory to you, feel free to call it off.

The Purchase Agreement

Your and your potential buyer must agree on all the terms of the deal before you can consider it final. Once you have agreed on all the terms, one of your agents-usually the buyer's agent-will prepare a formal purchase agreement that includes all the terms of the offer. Most states have (and require you to use) a boilerplate purchase agreement. In other states, a formal offer signed by both parties is sufficient. Any changes to the agreement that result from inspections or other issues should be documented in a written addendum to the agreement, signed by both parties.