The negotiation phase in the sale of a house begins as soon as a buyer makes an offer and only ends once both parties have agreed on both the price and the terms. Only then is the purchase agreement drawn up and signed. Read on to find out exactly how this phase unfolds, what rules apply, and what can go wrong.
Who is allowed to negotiate on behalf of the seller?
The seller may negotiate personally, but in practice a selling agent does so on their behalf. The agent then holds a power of attorney to negotiate on price and terms. Without an explicit power of attorney, an agent may not make binding commitments on behalf of the seller.
A selling agent knows the market, understands when an offer is realistic, and can prevent emotional decision-making. This is a concrete advantage: an experienced agent negotiates based on facts and market knowledge, not on gut feeling. Together with the seller, the agent establishes in advance what the minimum price is and which terms are open for discussion. This ensures the seller is never caught off guard at the negotiating table.
Sellers who negotiate without an agent risk accepting an offer below market value, or agreeing to terms that cause problems down the line. A good agent actively protects your interests — not only by negotiating, but also by asking the buyer the right questions.
How do offers and counteroffers work in practice?
A buyer submits an offer, typically in writing or through their agent. The seller has three options: accept the offer, reject it, or make a counteroffer. This back-and-forth of offers and counteroffers is known as the negotiation phase. There is no legally prescribed deadline for responding, but in practice a reply is expected within one to two business days.
A counteroffer does not have to be about price alone. Seller and buyer also negotiate over:
- The completion date: when the keys will be handed over
- Movable property: which furnishings or appliances are included in the sale
- Contingencies: such as a financing contingency or a structural survey
- The deposit or bank guarantee: typically 10% of the purchase price
As long as agreement has not been reached on all aspects, there is no deal. A verbal agreement on price alone is therefore not a binding contract. Only once both parties have agreed on the full content of the agreement can the purchase contract be drawn up.
What are contingencies and how do they affect the negotiation?
Contingencies are clauses that give the buyer the right to withdraw from the purchase if certain conditions are not met, without incurring a penalty. The most common are the financing contingency and the structural survey contingency. They directly affect the negotiation because they reduce the buyer’s risk while diminishing the seller’s certainty.
A seller who wants to sell quickly may have an interest in limiting or shortening contingencies. A buyer who has not yet secured their mortgage, on the other hand, wants as long a financing contingency as possible. This difference in interests is one of the most common points of tension during negotiations.
Commonly used contingencies:
- Financing contingency: the buyer can withdraw from the purchase if they are unable to secure a mortgage, typically within four to six weeks
- Structural survey contingency: if the survey reveals serious defects above an agreed amount, the buyer may withdraw from the purchase
- National Mortgage Guarantee (NHG): the purchase lapses if the buyer is unable to obtain NHG
As a seller, it is wise to carefully review the conditions a buyer attaches to their offer. A lower offer with no contingencies can be more attractive than a higher offer with extensive conditions attached.
Is a seller allowed to negotiate with multiple buyers at the same time?
Yes, a seller is generally permitted to negotiate with multiple interested buyers simultaneously. There is no legal obligation to negotiate exclusively with one party. The seller must, however, be honest about the fact that multiple offers are in play, and may not actively mislead buyers about each other’s bids.
In practice, when there is significant interest, agents often opt for a bidding procedure. All interested buyers are then given the opportunity to submit their best offer before a set deadline. This avoids endless back-and-forth and gives the seller a clear overview of all options.
What the seller is not permitted to do:
- Inform one buyer of the exact offer made by another buyer
- Create false scarcity by implying there are more offers than there actually are
- Make commitments to multiple buyers at the same time
The seller does have the freedom to choose a particular buyer without giving a reason, even if that buyer has not made the highest offer. Factors such as financing certainty or a flexible completion date can be the deciding factor.
When is a purchase agreement officially in place?
A purchase agreement is officially in place once both parties have signed the purchase contract. A verbal agreement or an agreement via email is not sufficient for the sale of a residential property. The law requires that the purchase agreement for a home be recorded in writing — known as the written form requirement.
After signing the purchase contract, the buyer has a statutory three-day cooling-off period. During this period, the buyer may withdraw from the purchase without giving a reason. After those three days, the agreement is binding, unless a contingency applies.
The purchase contract is typically drawn up by the agent or the notary and contains all the agreements made during the negotiation: the purchase price, the completion date, the contingencies, and the arrangements regarding movable property. Always review the purchase contract carefully before signing, because once the cooling-off period has passed, all agreements are legally binding.
What can go wrong during the negotiation phase?
The most common problems during the negotiation phase are: a buyer who is unable to secure financing, unexpected defects uncovered during the structural survey, and disagreements over movable property or the completion date. Negotiations can also stall when expectations about the price are too far apart.
Other risks you may encounter as a seller:
- Buyer backs out after a verbal agreement: as long as the purchase contract has not been signed, there is no binding agreement and a buyer can withdraw
- Disputes over the condition of the property: if defects come to light after the viewing, this can lead to renegotiation or even a lower price
- Unclear agreements about movable property: what stays in the property? Ambiguity on this point regularly leads to disputes shortly before the transfer
- A prolonged negotiation period: the longer negotiations drag on, the greater the chance that a buyer pulls out or that market conditions change
Thorough preparation significantly reduces the likelihood of problems. As a seller, make sure you know your minimum price, which terms you are willing to accept, and how you will handle a structural survey. Clarity at the start of negotiations prevents surprises at the end.
How we help you sell your home
At Urban Homies, we guide you through the entire sales process, from the initial valuation to the key handover at the notary. We develop a targeted marketing strategy, arrange professional photography, and write a listing that suits your property and reaches the right audience. Our approach is personal: you are assigned a dedicated advisor who knows the market and actively negotiates in your best interests.
What we do for you during the negotiation phase:
- Evaluating offers and advising on counteroffers
- Safeguarding your minimum price and terms
- Organizing a bidding procedure when there are multiple interested parties
- Drawing up or reviewing the purchase contract
- Support through to the transfer at the notary
Would you like to know what your home is worth and how we approach the sales process? Get in touch for a no-obligation conversation, or visit our selling agent services page for more information.
