How should I actually compare two offers?
On five things, and price is only the first. What they are paying, how they are paying, what they can still walk away from, when they close, and what they are asking you to pay for.
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| What to compare | What you are looking for |
|---|---|
| Price | The number, and how it sits against what has actually closed nearby |
| Financing | Cash, conventional, jumbo or government backed, and how much is going down |
| Contingencies | Which ones, and for how many days |
| Deposit | Size, and how soon it reaches escrow |
| Closing date | Whether it fits what you are doing next |
| Credits and concessions | Anything you are being asked to pay toward their costs |
An offer $25,000 higher with a thirty day loan contingency and three percent down is frequently worth less than one at asking with twenty five percent down and ten days. The first is a maybe with a long tail; the second is close to certain. Getting this wrong costs sellers more than under-pricing does, because a deal that falls out after two weeks puts you back on the market with days on market already accumulated.
The useful frame is not "which is the best offer" but "which of these is most likely to close, at what number, on the date I need". Rank them that way and the answer is often not the top line.
What makes an offer strong besides the price?
Certainty. Every term that removes a way for the buyer to leave, or a reason the lender could say no, is worth real money against a higher number that carries more risk.
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In rough order of what we weigh: money down, because a larger down payment absorbs an appraisal shortfall and makes the loan easier; shortened or removed contingencies, especially the investigation period; a deposit that is larger than the minimum and lands quickly; a closing date that matches your next move; and whether the buyer has already addressed what happens if the appraisal comes in low. That last one separates a serious offer from a hopeful one.
Against all of that, the market gives you a benchmark. The National Association of Realtors found the median purchase price was 100 percent of asking, with 33 percent of buyers paying exactly the asking price, 23 percent paying above it and 46 percent below. A listing priced where the evidence sits lands in the top of that spread; one priced above it lands in the bottom, later.
How do I tell whether a buyer can actually close?
Read the letter, not the word on it. A pre-approval that names a lender who has verified income and assets is a different document from a pre-qualification, and cash needs proof of funds rather than a statement of intent.
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What we look for: who wrote the letter and whether we can call them, whether income and assets have actually been verified or merely stated, whether the approval amount matches the offer rather than exceeding it by a wide margin, and how long the underwriting has been running. A letter dated the day of the offer from a lender nobody has heard of is not the same as one from a local lender who answers the phone.
Cash offers get the same scrutiny in a different form. Proof of funds means a current statement showing the money exists and is liquid, not a portfolio summary or a letter promising a liquidation. Cash is faster and removes the appraisal question entirely, which is worth something real, but only once the money is demonstrably there.
What happens if the appraisal comes in under the offer?
The lender lends against the appraised value, not the contract price. Somebody has to cover the difference, and who that is should be settled in the offer rather than in week three.
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This matters more at Orange County price points than most sellers expect, because a strong offer in a fast-moving tract can outrun the most recent closed comparable, and the appraiser is working from those. The gap is not a sign anything is wrong; it is arithmetic catching up.
Three ways it gets handled, and they are visible in the offer if you know to look: the buyer covers the shortfall in cash, the buyer has waived or limited the appraisal contingency, or nobody has addressed it and you will be renegotiating. An offer that has already answered this question is worth more than one that has not, and it is a fair thing to ask for in a counter.
Do I have to pay the buyer's agent?
No. Whether you contribute anything toward the buyer's broker is your decision and it is negotiated, and since August 2024 it can no longer be advertised on the multiple listing service.
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What changed is where the conversation happens, not whether it happens. An offer of compensation cannot appear on the MLS any more, so a buyer's agent is paid under an agreement with their own client, and any contribution from you becomes a term of the deal negotiated alongside price. It can still be offered, discussed and agreed; it just is not published.
How we think about it: a contribution toward a buyer's costs is a price concession by another name, and should be weighed the same way. Sometimes it is the cheapest way to close a gap, because it can move a buyer's monthly payment more than an equivalent price reduction would. Sometimes it is money you did not need to spend. It depends entirely on how many buyers you have.
What happens when I counter an offer?
Your counter ends their offer and replaces it with yours. The original is gone, and the buyer is now free to walk, accept, or counter you back.
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This is the single most misunderstood thing in a negotiation, and it has a practical consequence: countering a good offer over something small is a real risk, not a free move. If an offer is close and the gap is a few thousand dollars, the question is whether that money is worth handing the buyer a fresh chance to reconsider.
It also means changing anything makes it a counter, including a date. There is no such thing as accepting an offer with a small adjustment. Either you sign what is in front of you, or you have made a new proposal.
Can I counter more than one buyer at the same time?
Yes, on a multiple counter offer. Nothing binds you until you sign a second time to select one buyer, which is what makes it safe to run several at once.
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| Stage | What is true |
|---|---|
| You send counters to several buyers | You are not bound to any of them |
| A buyer signs and returns one | Still not binding on you |
| You sign a second time on one of them | Now you have a contract, with that buyer |
| That buyer receives the fully signed copy | The contract is formed |
Used well this is the strongest tool a seller has in a multiple offer situation, because it lets you ask every serious buyer to improve without choosing between them first. Used carelessly it damages trust with agents you will deal with again, so the courtesy is to be clear that it is a multiple counter and to move quickly once you have your answers.
Our own view: the terms worth countering for are almost never just price. A shorter investigation period, a larger deposit and a written answer on the appraisal gap will often do more for the outcome than another ten thousand dollars would.
When does an offer actually become a contract?
When your signed acceptance reaches the buyer the way the offer says it must. Not when you sign it, and not when you decide.
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Delivery is the moment, which is why a signed page sitting on your kitchen counter is not a sale. It also means you can change your mind up until that delivery happens, and so can a buyer with an offer you have not yet accepted.
An electronically signed agreement is a real contract, and the whole transaction now runs that way. The practical effect is that acceptance can happen in minutes, so once you have decided, the clocks in the contract start immediately rather than whenever the paperwork catches up.
What is the buyer's deposit actually for?
It is the buyer's money until you have a contract, and after that it is the fund you can reach if they default. Size and speed both tell you something about the buyer.
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A deposit larger than the minimum, delivered quickly, is a buyer signalling they are serious, and it is one of the cheapest things to ask for in a counter. A minimum deposit that arrives late is worth noticing early.
If a sale does collapse, the money does not simply transfer. Escrow releases it only on instructions both sides sign, and the amount a seller can keep on a home of four units or fewer is generally capped at 3 percent of the price. In practice these situations are settled rather than fought, and if you are ever in one, it is a conversation for your attorney rather than a page on a website.
What do sellers get wrong in a negotiation?
Optimising the top line. The offer that pays most is not always the offer that closes, and the difference shows up as weeks back on the market with your days on market already counting.
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The pattern we see most: a seller takes the highest number with the weakest financing and the longest contingencies, it falls out in week three, and the relist is now competing against its own history. The National Association of Realtors found 36 percent of sellers reduce the asking price at least once and 24 percent end up offering incentives, and a good share of that starts here rather than at the original pricing.
The second is countering out of principle on a small gap. If the offer is close and the buyer is strong, the few thousand dollars is usually worth less than the certainty you are risking to chase it. Knowing which of those two situations you are in is most of what you are paying an agent for.
FAQs
Common questions about Offers & Negotiation
Should I always take the highest offer?
No, and this is where sellers lose the most money. An offer higher on price but weaker on financing, with longer contingencies and a small deposit, is frequently worth less than one at asking with a large down payment and short periods. Rank offers by how likely they are to close, at what number, on the date you need.
What makes one offer stronger than another at the same price?
Certainty. A larger down payment absorbs an appraisal shortfall and makes the loan easier to approve. Shorter contingency periods reduce the number of ways a buyer can leave. A bigger deposit delivered quickly signals commitment. And a buyer who has already addressed what happens if the appraisal is low has answered the hardest question in advance.
How do I know whether a buyer can really close?
Read the letter rather than the label. A pre-approval where the lender has verified income and assets is a different document from a pre-qualification based on what the buyer said. Check who wrote it, whether you can call them, and whether the amount matches the offer. Cash needs a current statement showing liquid funds, not a portfolio summary.
What happens if the appraisal comes in below the offer?
The lender lends against the appraised value, so somebody has to cover the difference. It happens at Orange County price points when a strong offer outruns the last closed comparable. The best offers have already answered it, either with cash to cover a shortfall or by limiting the appraisal contingency, and it is fair to ask for that in a counter.
Do I have to pay the buyer's agent?
No. Whether you contribute anything toward the buyer's broker is negotiable and is your decision. Since August 2024 it cannot be advertised on the multiple listing service, so it is agreed as a term of the deal alongside price rather than published in advance. Treat any contribution as a price concession and weigh it the same way.
Does countering an offer put it at risk?
Yes, and this is the most misunderstood point in a negotiation. Your counter ends their offer and replaces it with yours, so the original is gone and the buyer is free to walk. Countering a strong offer over a few thousand dollars is a real risk rather than a free move, and worth thinking about before you send it.
Can I counter several buyers at once?
Yes, on a multiple counter offer, and nothing binds you until you sign a second time to select one buyer. It is the strongest tool in a multiple offer situation because you can ask every serious buyer to improve without choosing first. The courtesy is to say it is a multiple counter and to move quickly once the answers are in.
When does the sale actually become binding?
When your signed acceptance reaches the buyer in the way the offer requires. Not when you sign, and not when you decide. A signed page on your kitchen counter is not a sale, and because everything is signed electronically now, acceptance and the contract clocks can both start within minutes.
How big should the buyer's deposit be?
Larger than the minimum, and delivered quickly. It is one of the cheapest things to ask for in a counter and one of the clearest signals of how serious a buyer is. A minimum deposit that arrives late is worth noticing at the start rather than at the end.
What if the buyer walks away, do I keep the deposit?
Not automatically. Escrow releases the money only on instructions both sides sign, and on a home of four units or fewer the amount a seller can keep is generally capped at 3 percent of the price. These situations are usually settled rather than fought, and if you are in one it is a conversation for your attorney.