All real estate offers need to be in writing

Q: We need advice right away. We are selling our home ourselves, and we got an offer this morning that is $8,000 less than we are asking. It’s only good for 48 hours. My wife isn’t sure about it. Can you discuss our options? — K.R.

A: First of all, we’ll assume this is a signed, written offer. If it isn’t you only have one option: Don’t respond. Say that you’ll be happy to consider any written offer. The statute of frauds says verbal contracts don’t count in the sale of real estate. Even if you agreed in the presence of witnesses to take their bid, and even if you accepted a good-faith deposit to bind the deal, you couldn’t hold them to it if they changed their minds later.

Your response will depend on lots of details you haven’t told me. Perhaps the most important is how long has your property been on the market? Has it always been for sale at this price? And has it been widely exposed?

An all-cash offer is the most attractive, but you’ll want some information about where the cash is actually available. Often, though, the proposal depends on the buyers obtaining a specific mortgage loan. If a real estate agent were involved, these buyers would have been screened. So you’ll want to know about their credit rating and income (how likely they are to obtain that loan) before responding.

The purchase may have to wait until they sell their current home (which would make their offer “contingent”). Whether you’d go along with that depends on your own needs and how long your home has been on the market. If you accept a contingent offer, it should contain an escape clause, which might let you out of the deal if you want to accept another offer that comes in later.

So you have three possible responses: yes, no or maybe.

“Yes” is your acceptance of all the terms in the offer, as it stands, without any alteration. You can, however, write the words “subject to the approval in the form of my attorney” above your signature, in which case your lawyer must later approve the wording and provisions of the contract for it to become binding. (Most lawyers will not counsel you on price, a matter they consider out of their field of expertise.) There is always, of course, the danger that a nit-picking lawyer unaccustomed to real estate might dither around until you lost the deal.

In theory, you are bound to accept if they offer your full asking price in cash and accept all your original terms. A real estate lawyer tells me it’s often possible, though, to object to a proposed closing date or find some such excuse if you change your minds about what you’d accept.

“No” is a simple refusal of the offer. If their offer is good for a relatively short time, simply let it expire unanswered. After that point, the buyers are no longer bound. If you change your minds a week later, you could not get their proposal back — you’d have to ask them whether they want to start over.

“Maybe” — which is usually better than a refusal — takes the form of a counteroffer. You agree in writing to accept their proposal if a few changes are made. Again, you risk losing your buyers. They are no longer bound and are free to accept or reject your counteroffer — or counter back with their own price or terms. While their decision is pending, your house is pretty much tied up legally, so you’d make your counteroffer good for only a day or two.

If your home is new on the market and has turned out to be a hot property, you may not want to be bound by a counteroffer. But if a couple of weeks have passed and your house is widely exposed, the market is probably operating normally. Before you reject or counter the first proposal, consider that the first offer sometimes is the best one.

Buyers are well advised to make their first offer near what they’d pay if they had to. And you are well advised to make any counteroffer close to what you’d really take.

If you are determined to stand pat on your asking price, you might consider the buyers’ pride and sign a token reduction to signal good will. Or you could offer to leave the refrigerator and the drapes. The buyers may not particularly want them, but it allows them to save face.

At the very least, they may feel their low offer won some concessions.

Contact Edith Lank at askedith.com, or at 240 Hemingway Drive, Rochester, NY 14620.