Does a Full Price Offer on your Home Necessarily Mean a Trip to the Bank for you?


In practicing real estate in the State of New Jersey since 1999, I have transacted numerous deals on behalf of both buyers and sellers.   What I have found consistent in all of the transactions, is that there really is no consistency in real estate.    Representing different homes, with different sellers, buyers, buyer’s agents, buyer’s attorneys, seller’s attorneys, and home inspectors make for a truly unique experience each and every time.  That said, issues arise in real estate that repeat themselves.   For this reason, it is a good idea to analyze those repeat offenders and try to gain some level of understanding and precedent for next time.

One such issue:  When a Seller gets a full price offer on their home, is there ever a situation that would justify said Seller turning down said offer?     Yes.   And here is why…..

In New Jersey Real Estate contracts, there are generally at least two major contingencies put on every offer. The first contingency is mortgage, the second is home inspection.

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Mortgage Contingency

A buyer bringing in a full price offer, or any offer for that matter, usually needs financing to complete the purchase. A mortgage contingency allows the buyer the right to cancel the contract should he ultimately not qualify to obtain financing. The timeframe for the mortgage contingency is usually at least thirty days in duration. The Seller’s house is removed from actively being shown for thirty days until the mortgage contingency is satisfied.  So it is possible for a seller to accept an offer and not become aware of a financing problem for thirty days.  In an ever-changing real estate market, only one thing is clear.    Inventory changes daily.    New competing homes could enter the market at any point in time and go under contract just as quickly.  If a Seller does accept an offer from a buyer who ends up cancelling the contract due to lack of financing, the real risk is that their home will have been removed from the market for at least 30 days during which time the market could have declined.  Sellers should make sure their buyers are well qualified by a reputable mortgage lender, or, in a best case scenario, finding out if their buyer is willing to waive the mortgage contingency will safeguard against this possible outcome.

Home Inspection Contingency

The second contingency that is typically placed on all home sales in New Jersey is the home inspection. This contingency allows the buyer to conduct their inspections and get back to the seller with their requests, if any, within a specified amount of time. The time frame for the home inspection contingency is usually two weeks. During the home inspection period, buyers arrange to have a number of tests conducted, including, termite, radon, oil tank, lead paint, in addition to a general inspection which covers roof to basement as well as exterior surfaces and grading. After these inspections are conducted, the buyer decides which issues he wants addressed. If home inspection issues are minimal, and the Seller agrees to repair or issue a credit for the Buyer’s requests, the purchase usually goes forward. However, more frequently in today’s market, the buyer will ask for a large list of concessions. Sellers are put in the situation of having to either concede a monetary credit or make certain repairs themselves before closing.  In either case, this is a concession off the sale price of the home which sellers must recognize when it comes time to calculate the net gain or loss on their home.   Many times these home inspection issues are ones that the Sellers never knew about or were never brought up during the Sellers home inspection when they originally bought the house. Buyers feel that the items identified by their inspector are essential to remedy in order to purchase the home. Two competing points of view make for a potential deadly impasse.   Analyzing a home inspection request list and knowing what is customary in your marketplace to concede are key factors for a Seller to come out of a home inspection period unscathed. 

Sellers should also bear in mind that real estate agents have a number of different pricing strategies that they use in pricing homes. Some agents prefer to price high and allow for negotiating room. Other agents feel that “real pricing” achieves the best effect.   With the latter scenario, homes are priced on the lower end of the spectrum in order to create excitement and interest in the property immediately. While this philosophy doesn’t work in every town, or price range, Sellers should be made aware at the outset which of the two pricing strategies their Realtor has in play.     The latter, “real pricing” strategy is only effective if Sellers are willing to allow the home full exposure to the marketplace.   Accepting a full price offer which comes prior to the home being shown to anyone else can present a risk to the Seller of leaving money on the table.

To summarize, is a full price offer something that is unquestionably right for every seller to accept?     Answer:    Not necessarily.  Each and every buyer offer must be evaluated carefully, and no deals are 100% fool proof until the front door keys are transferred from seller to buyer on day of closing.


Jane Johanson, GRI, ABR

Sales Associate

Keller Williams Premier Properties

488 Springfield Avenue

Summit, New Jersey 07901


Speak to a licensed realtor to understand more details about your specific real estate market before making these decisions uninformed.

 The Guest Column is our readers' opportunity to write about a given issue or topic in an in-depth and educational manner.

The opinions expressed herein are the writer's alone, and do not reflect the opinions of or anyone who works for is not responsible for the accuracy of any of the information supplied by the writer.

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