When sellers think about negotiation it usually refers only to the purchase price of their house. Let’s talk about how negotiation skills are important when choosing a Realtor to help you sell your house.


Price is the first and most important part of marketing your house. Depending on how much you list your house for in relation to other comparable sales in your neighborhood you could generate multiple offers above list price. It is also the most important part of negotiating offers with potential buyers. Your focus, as the seller, is on how much money you can walk away with when the deal closes. Your Realtor should have strong negotiating skills to help you with obtaining the highest price possible. One way you can know you have a strong agent is if you tried to negotiate a lower commission and that agent influenced you to accept their original sales commission when signing the listing agreement. If you were able to negotiate a lower commission chances are your agent will be weak when negotiating with buyer’s agents. That’s not what you want!

Negotiations don’t stop there…what about the other terms of the contract? I can already hear you asking, “What other terms could possibly be that important?”

Here are a few terms of the CA purchase agreement that will be important when considering what offer to accept on your house.

  1. Earnest money deposit (EMD): The EMD is a percentage of the purchase price that the buyer is willing to deposit with a Title/Escrow company to reserve the home for the escrow period. Many agents advise buyers to deposit a minimum of 1% of the purchase price. The higher the EMD a buyer offers the more serious and financially capable they are. You want a serious buyer for your house. When in a multiple counter offer situation this can help weed out the not so serious buyers.
  2. Loan Contingency: Most people ready to purchase a home will be relying on obtaining a mortgage to finance the purchase. The standard CA loan contingency is 21 days. Depending on the type of pre-approval letter that accompanies the offer I always review and recommend a shorter contingency if any at all.
    1. Buyers who have a fully underwritten approval may offer no loan contingency. These buyers are the best besides an all cash offer. They have secured financing and have capability of purchasing your house.
    2. Buyers who are not underwritten will usually submit a pre-approval letter “subject to underwriting”. These buyers have had credit checked and income verified, however; an underwriter has not reviewed their entire financial picture to determine they are truly qualified to pay the mortgage payments. The loan contingency offered is usually the standard 21 days and may be shortened slightly to make the offer more attractive. I don’t recommend taking a shortened time on these unless I’ve worked with the lender and have received written confirmation that they will be able to obtain full approval before the contingency time expires.
    3. Buyers who submit an offer accompanied with a Pre-Qualified letter are the weakest offers and should be approached with caution. These buyers have not had their income or credit report verified.
    4. Your Realtor should contact the lender to verify the loan contingency terms and status of the buyer’s financing prior to presenting the offer.
  3. Appraisal Contingency: The appraisal contingency allows the buyer to come back to renegotiate the price if the appraisal does not support the purchase price. The appraisal contingency in a CA purchase agreement is a standard of 17 days. When a buyer’s agent is confident in the lender’s process sometimes they will shorten the contingency with the lenders approval. Some buyers will remove the appraisal contingency, however; this is very rare. Every situation is different and if the offered purchase price for your house is higher than comparable sales I recommend a partial appraisal contingency release. The buyer will pay the difference between the purchase price and appraised value, sometimes with a cap on how much over the appraised value they will bring to the closing table. This will relieve you of having to stress about renegotiating the price of your home if the appraised value is lower. Your Realtor should contact the lender to verify the lender will be able to perform within the contingency period before presenting the offer.
  4. Inspection Contingency: The standard CA purchase agreement contingency period is 17 days. The shorter the period the more motivated a buyer will be to inspect and negotiate repairs and/or release the contingency. I recommend accepting offers with shorter inspection periods to give a buyer less time to potentially back out of the contract. This allows the seller to get the home back on the market quickly if a buyer finds something unfavorable about the condition of the house.
    1. You, the seller, can potentially avoid losing a buyer to an inspection contingency when you perform your own inspections prior to listing your house. You can repair any issues that could be a potential turn off for buyers and you create a higher perceived value for your house.
    2. Typical inspections are Pest Inspections for wood destroying pests and dry rot; General Home inspections; Roof inspections; Chimney inspections for wood burning fireplaces and stoves; Pool inspections. Other inspections may apply depending on the features of your house.
  5. Repairs: In California a buyer has the option to submit a Request for Repairs based on their inspections. You are not obligated to respond, however; if the request is reasonable and supported with copies of the inspections and quotes from reputable contractors you may want to respond in order to keep the sale moving forward.
  6. Contingency on Buyers Sale of Property: This contingency is most common when the buyer may or may not have listed their house for sale, however; their new mortgage depends on the down-payment they receive from their sale. Your Realtor should call to discuss the buyer’s listing with their agent to get as much information as possible to help you make the best decision.

Ultimately, all final decisions are up to you. I will advise you how to best respond in any of these contingency situations and negotiate the best purchase price and terms for you.

Call or email me for a personalized needs analysis and marketing consultation.

Cheers to your success!

Brandy Christensen, Realtor / Keller Williams Realty

CA BRE# 01971181 / M: 916-600-1239 / E: brandy.christensen@kw.com