If you are buying an investment property, you’re probably wondering “How long do sellers have to respond to an offer?”
Once you have settled on an investment property for sale, the next steps can make or break the deal. You do not want to rush the seller and make them back off, but you also want to see the deal through as fast as possible.
There are standard procedures when making an offer on a house and your real estate agent will help you do it right. But so you know what you’re getting into, let’s take a look at how long a seller has to respond and a few other key elements of this stage in the buying process.
How Long a Seller Has to Respond to an Offer
You can set the consideration window yourself in the purchase offer letter when making an offer on a home. This is the official document declaring your interest in buying the real estate property. Your real estate agent delivers it to the seller’s side immediately after you sign it and then the countdown begins.
Up to 3 days is a standard expiration date in the real estate industry although common courtesy among agents is to respond within 24 to 48 hours.
A Buyer’s Market or a Seller’s Market?
In a buyer’s market, you will get faster responses than in a seller’s market when multiple offers on a house are being considered at the same time. Let’s explore this further.
A buyer’s market is when there are more real estate properties for sale than there is a demand for. This drives prices down and gives an advantage to buyers in the real estate negotiation. You would have more properties to choose from even if some sellers reject your offer. Generally, sellers would be more open to negotiation and selling fast.
A seller’s market means the available properties for sale do not meet demand and prices are higher. Sellers would get multiple offers on a house so they would take more time to get bids as high as possible.
According to an expert forecast, the US housing market will be shifting from a seller’s market to a buyer’s market in 2020, but the change is slow. Right now, the cities with the best buyer’s markets are:
If you are buying an investment property and are open to going into any real estate market, try these cities. Do you have a free Mashvisor account? Use our Property Finder to find lucrative investment property for sale in a city of your choice.
Exceptions
When a bank is selling a foreclosure or a short sale, the process can take up to a month. Because the sale involves a large institution like a bank, it will usually take longer for you to get a response.
Related: Short Sale vs Foreclosure: What’s the Difference?
Do Sellers Have to Respond to an Offer?
No, they don’t have to. If your offer is not the winning one, you might never hear from them. This happens if your offer is too low or the terms are too far from what is expected. In this case, most sellers would not waste time making a counteroffer. Also, the seller’s agent cannot respond on behalf of their client and cannot force them to respond to you.
In other cases, they are seriously considering your offer but want to see others as well. They might ask for extra time to respond if they expect more offers to come in. Keep in mind that you can always withdraw your offer for any reason, including feeling that the seller is deliberately taking too long to respond. Articles answering, “How long does a seller have to respond to an offer?” should be read by sellers, too, if they want to be taken seriously by buyers.
Let’s take a look at the different responses you may get.
Counteroffer
A seller can respond to an offer with a counteroffer. This can mean different things:
- A higher price
- Changing some of what’s included. For example, if you offered a lower price, they might propose taking out the appliances or furniture originally included in the price.
- A different split of the closing costs.
- Different contingencies, the conditions to be met to complete the deal like a home inspection.
- A correction in the closing and delivery dates, when the deal will be finalized and the property will move into your possession.
Related: How Much to Offer on a House: An Investor’s Guide
The counteroffer will have a deadline for you to respond to it now. If it does not, play by the same rules you set earlier with your offer.
What If Sellers Reject Your Offer?
In case the seller does respond negatively, you can submit a new offer with better terms than your initial offer. This can mean offering a higher price, or a bigger down payment, or loosening the contingencies. Talk it over with your real estate agent and be ready for some real estate negotiation.
Related: 10 Best Real Estate Negotiation Tips for Buyers
What If a Seller Doesn’t Respond to an Offer?
If there is no response past the expiration date, your agent can ask the seller’s agent for feedback just to make sure there are no unforeseen circumstances. You can also make a new offer since the initial one is probably expired by that time, but there is little use if it is the same. It was either too low or they already accepted another offer.
The best thing to do is to move on to other listings for sale and even make purchase offers. One good rule of thumb for real estate investors and buyers is to not get emotionally attached to properties before a deal comes through. If you are fixed on a property, it only puts you in a worse negotiation position. Renew your property search and better opportunities might come up.
A Few Final Tips for Buyers
Do not stop researching investment properties as soon as you make an offer on a house. While you are waiting for the seller to respond to an offer, keep going to showings – you never know what gem might come up. Also, the better you know the real estate market at the moment, the more leverage you have in negotiations and counteroffers.