NEGOTIATIONS – Don’t be afraid of the negotiation process when selling your home. This is a great opportunity!! You have someone who wants to buy your home. A deal is successful when both you and the buyer are happy with the terms. The negotiation process should be friendly and non-confrontational.

Presentation of an offer
The presentation of an offer/contract can be handled several ways. It’s preferable that you contact a real estate attorney to help you review, prepare and negotiate the offer. You and the buyer can meet and discuss the offer face-to-face before it’s in writing. Simply discuss the situation and come to an agreement. It is best to contact a real estate attorney to prepare the contract based on what you and the buyer have discussed. Or…….If an offer has been prepared and presented to you, then you can either review it alone and make the decision to accept or counter, or contact a real estate attorney to assist. If your prospective buyer is working with a real estate agent and you have agreed in advance to pay a commission, the agent will present the offer to you and you negotiate with the buyer’s agent. If your prospective purchaser is working a buyer’s agent or an attorney, keep in mind they are working for the purchaser and not you. Best advice - hire a real estate contract attorney to handle the negotiations on your behalf.

• Once an offer is presented, you can (preferably with the assistance of your real estate attorney):
• Accept the offer as is, sign it and it becomes a legal binding contract.
• Counter-offer back to the buyer by making changes in the offer and initialing the changes. The buyer has the option of walking away if the changes are unacceptable but negotiations have been re-opened.
  
• Decline the offer – this should not be an option. You should at least make a counter-offer.

Many issues can arise during the negotiation but it’s worthy to discuss a few that you should understand and be prepared to handle. Again it is best to consult the advice of a real estate attorney but ultimately the decision is yours.

Buyer offers a low price
If the offer is low or not within the range at all, counter offer a little below your asking price. Be prepared to go through several counter offers. You may ask the buyer how they arrived at their offer. It’s possible that the buyer may have done more research than you and have good evidence that your price is high. If this happens then you’ll eventually have to drop your price - no matter who buys the property. If the buyer tells you this is all they can afford, then very likely they are not really qualified to buy your home so don’t spend a lot of time negotiating.

Buyer has a house to sell before they can buy yours
Accepting this contingency has many pitfalls and if possible you should try to avoid accepting an offer with this contingency. Your first response should be to suggest to the buyers to talk to their lender about a bridge loan or other type of loan. This will also tell you how serious they are about purchasing your house if they make the effort to talk to their bank. They will need to qualify to carry both houses at the same time. If they can qualify, you can extend the closing date on your house to give them the time to sell their house. That way, they have the time they need and you have a guarantee that they will close on your house regardless if they sell their current home. If they can’t qualify but it seems reasonable to you that their house will sell and these buyers seem like good prospects, you might consider taking the offer, but including a "kick-out clause". A “kick-out clause” means that you continue to market your house, and if you get another offer, the first buyers will have 24-48 hours to prove that they can perform on their contract without selling their current home, or they get "kicked out". They will get a return of their earnest money deposit. You are then free to negotiate with the new purchasers. Anytime you accept a contract with a contingency, it should include a time frame for the satisfaction of the contingency, even if you have a “kick-out clause”. In other words you could allow the buyers 45 days to get a firm contract on their house and 45 more day to close. We strongly recommend that you hire a real estate attorney when you are dealing with complicated situations such as this because if you exercise the kick-out clause, you must make an agreement with the newest purchasers that their contract is contingent on the first buyers being released.

The offer is contingent upon the buyer obtaining financing
This is very standard. Most people do not pay for a house with cash. But there are certain elements that sellers should avoid. Generally, you should not enter into a contract that is contingent on the buyer receiving a certain interest rate and points. Let the buyer know that it is fine for them to shop around to get the best mortgage terms, but that the contract must say that that they will take "market" terms. This means that the buyer can’t get out of your contract just because interest rates go up - unless they no longer qualify for the loan.

Buyer has too many personal property items in the contract
If it’s not nailed, fastened or attached to the house, it is not included in the sale unless the buyer has made special provisions for it in the contract. Buyers and sellers must be careful because if there are too many valuable personal items in the contract, the mortgage lender may deduct the value of these items for the purpose of the mortgage.

Sale is contingent on the house passing inspection
A home inspection is not an appraisal and it is becoming common practice to see this contingency in contracts. The purpose of the home inspection is to disclose the condition of the property to the buyer. In Illinois, disclosure by the seller is required by law. Sellers may opt to have an inspection before the home goes on the market. This conveys to the buyer that you are selling a structurally and mechanically sound house. Regardless, a prudent buyer will require an inspection and you should expect it.

Most negotiations and contracts go smoothly from beginning to end. However it is recommended that you consult legal consul of your own choosing to assist you in this process.