What to Consider When Deciding to Accept or Decline an Offer

Selling your home is an exciting milestone, especially when offers start rolling in. However, deciding whether to accept, counter, or reject an offer can be a complex process. While price is a key factor, it’s far from the only consideration. The right offer for you depends on your unique goals and circumstances.

Here’s a guide to help you navigate the decision-making process with confidence and ensure you evaluate offers holistically.

1. More Than Just a Number: Assessing Earnest Money Deposits

The earnest money deposit (EMD) is a strong indicator of a buyer’s commitment. This upfront payment is held in escrow and applied to the down payment at closing.

A higher EMD signals a serious buyer and provides added security for you.
Standard deposits range from 1% to 2% of the purchase price, but some buyers may offer significantly more to stand out.

If the buyer backs out without a valid reason, you typically get to keep the deposit. Strong EMD terms can make an offer more appealing, even if the purchase price isn’t the highest.

2. The Role of Contingencies

Contingencies are conditions that must be met for the sale to proceed. Fewer contingencies often mean a smoother path to closing, but it’s important to evaluate each one carefully.

Common contingencies include:

Inspection Contingency: Allows the buyer to request repairs or walk away based on inspection results.
Appraisal Contingency: Ensures the home’s value supports the agreed price for loan approval.
Financing Contingency: Protects the buyer if their mortgage isn’t approved.
Sale of Current Home: Tied to the buyer selling their own property first, which could delay your timeline.

Minimizing contingencies often strengthens an offer, but your agent can help weigh the risks and benefits of each.

3. Evaluating Down Payments

A buyer’s down payment reflects their financial strength and likelihood of loan approval.

Larger down payments generally indicate a more secure transaction.
Buyers with smaller down payments may face greater challenges during the financing process, increasing the risk of delays.

While every offer is unique, higher down payments often instill confidence in sellers.

4. Cash Is King: All-Cash Offers

All-cash offers eliminate many uncertainties, such as financing and appraisal contingencies.

Without lender involvement, the transaction often moves faster and carries fewer complications.
Although cash buyers may sometimes offer less, the certainty and speed they provide can outweigh the higher price of financed offers.

Cash offers are particularly attractive if you’re seeking a quick, hassle-free closing.

5. Timing: Closing Dates and Flexibility

Your ideal closing timeline depends on your personal plans.

If you’ve already purchased a new home, a quick close may be your priority.
If you need extra time to move, a longer closing period might be more appealing.

Some buyers may offer flexibility, such as a rent-back agreement that allows you to stay in the home temporarily after closing. These arrangements can provide added convenience during your transition.

Making Counteroffers

If an offer doesn’t fully meet your needs, you have the option to counter. This might involve negotiating the price, adjusting the closing timeline, or revising contingencies.

In competitive markets, you may have more leverage to request higher bids or improved terms.
In balanced or buyer-friendly markets, a more measured approach may be necessary.

Work closely with your agent to determine when a counteroffer is appropriate and how to structure it for the best outcome.

When an Offer Becomes a Contract

An offer becomes binding when both parties sign and agree on the terms. At that point, timelines for contingencies and closing are set in motion. From there, it’s a matter of ensuring all conditions are met and preparing for the final transfer of ownership.

Final Thoughts
Evaluating offers goes beyond just picking the highest number. By carefully considering factors like contingencies, earnest money, payment methods, and timing, you can make a choice that aligns with your financial goals and personal needs. Your agent will be an invaluable partner in this process, helping you navigate the details and secure the best deal for your situation.