Q. What is a reverse offer and how does it work?
A. The current real estate market is one of uncertainty and indecision. Buyers who might normally look at 10-15 homes are taking their time and looking at 15-30 homes.
Buyers are hesitant about “pulling the trigger” to buy a home because:
- Some buyers are intent in wanting to buy at the bottom of the market, and they don’t know if housing prices are going any lower.
- There is no “perfect” house, but with so many houses on the market, many buyers are waiting for “the next one” in hopes that they will like it better in terms of price, location, and condition than the homes currently for sale on the market.
- From a buyer’s perspective, even if another house doesn’t come along that they like better, there is little urgency. The house they saw three times in the last three months may still be there next month if they don’t find something they like better in the meantime.
Ugh! What is a seller to do?
This is where a reverse offer could do the trick. A reverse offer is where a seller makes an offer to a buyer or a number of buyers who have already seen and shown interest in the property (like the buyer who looked at it 3x’s).
To motivate that buyer, the seller generally should offer some type of incentive that was not previously on the table, such as
- A lower asking price (but if a seller was contemplating a price reduction anyway….)
- Seller assistance with closing costs
- Buying down the interest rate
- A home warranty
- Personal property such as appliances, furnishings, TV/stereo equipment, etc.
Additionally to motivate a buyer, a reverse offer is best if it is made to multiple interested parties and they all are aware of the competition and that “the house goes to the first person who accepts the offer.” There should also be a short timetable for acceptance of the offer and closing on the house.
The best approach is to have your agent contact the buyer’s agent to determine what is holding the buyer back and then structure the offer to specifically address those issues. For example, a buyer who is worried about the monthly payment will respond better to buying down the interest rate than including personal property.
Many sellers worry that a reverse offer may make them look “desperate.” This doesn’t have to be the case. Buyers typically respond well to sellers who appear flexible and interested in “making a deal.” Any concessions above and beyond the seller’s initial offer to the buyer would have to be agreed to and signed by the seller. Please call us if you are considering a move, 215-513-1333.
Contact Scott Loper, Associate Broker, Realtor®, RE/MAX Realty Group at 215-513-1333 for help buying or selling a home in Lansdale, Harleysville, Hatfield, Souderton, Skippack, Collegeville, North Wales and the surrounding areas of Montgomery County of Pennsylvania. To Search for Homes For Sale in Montgomery County Click Here.
What is a Reverse Offer? Let's Make a Deal! - Copyright © 2011, The Scott Loper Team, All rights reserved.
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The Scott Loper Team
Scott Loper - Associate Broker
Lisa Loper - Sales Associate
Gina Wherry - Sales Associate
RE/MAX Realty Group
439 Main Street
Harleysville, PA 19438
Ph: 215-256-1200 x-213
