Reviewing and Negotiating Offers

An offer is much more than a price. Every term affects how much you take home and how likely the sale is to close. Here's how I help sellers compare and respond to offers.

What's in a Texas Offer

Texas real estate agents generally use contract forms promulgated by the Texas Real Estate Commission (TREC). For most resale homes, that means the One to Four Family Residential Contract (Resale), plus any addenda the deal calls for. Key terms include:

Sales price, and how much is paid in cash versus financed
Financing details, usually in a Third Party Financing Addendum
Earnest money and the option fee, both delivered to the title company
Length of the option period
Title policy and survey provisions
Property condition, including any repairs agreed to up front
Closing date and when the buyer takes possession
Any seller contribution toward the buyer's costs
Addenda for items such as a property owners' association, a sale contingency, or a temporary lease

Net Proceeds vs. Price

The highest price isn't automatically the best offer. A higher price with a large closing-cost request can leave you with less than a lower, cleaner offer. For each offer, I'll prepare an estimated net sheet showing what you would walk away with after your loan payoff, closing costs, and any concessions.

Financing and Buyer Strength

Cash or financed. Cash removes lender approval; you should still see proof of funds.
Loan type. Conventional, FHA, VA, and other programs each have their own appraisal and property guidelines. I'll explain what each one means for your home and timeline.
Pre-approval quality. A pre-approval based on a lender's review of income, assets, and credit carries more weight than a quick prequalification. My background as a loan officer and mortgage broker helps me know what to ask the buyer's lender.
Appraisal terms. Some buyers agree in advance to cover part or all of any gap if the appraisal comes in below the price.

Option Period and Option Fee

The option period gives the buyer an unrestricted right to terminate for a set number of days, usually used for inspections. The buyer pays an option fee for that right. Both the length and the fee are negotiable. A shorter period gets you to a firmer contract sooner, and a larger fee signals commitment. If the buyer terminates within the option period, you generally keep the option fee and the buyer generally gets the earnest money back.

Closing Date and Possession

A closing date that lines up with your move can save you storage or overlapping housing costs. If you need a little time after closing, a seller's temporary lease can be negotiated.

Seller Concessions

Buyers may ask you to cover part of their closing costs, help with a rate buydown, contribute toward their agent's compensation, or provide a home warranty. They're negotiable, so weigh them against price. Loan programs can also limit how much a seller is allowed to contribute.

Handling Multiple Offers

Highest and best. With several offers, I may suggest asking every buyer for their highest and best terms by a set deadline.
Compare the whole package. Price, financing, appraisal terms, option period, closing date, and concessions all matter.
Escalation clauses. Some buyers offer to beat competing offers by a set amount, up to a cap. This language deserves careful review, and you may want an attorney's opinion before relying on it.

Counteroffers

You can accept an offer as written, reject it, or counter. A counteroffer changes terms and puts the decision back with the buyer. Once you counter, you generally can't go back and accept the buyer's original terms unless they offer them again. When both sides have signed final terms and acceptance has been communicated, that date becomes the effective date and starts the clock on deadlines such as earnest money and the option period.

This page is general information, not legal advice; for questions about specific contract language, consult a real estate attorney. To see what happens after you accept, read from contract to closing.

Get a Second Set of Eyes on Every Offer

I'll lay out each offer side by side. Contact Tarus to talk through your options.