What do buyers and sellers in Sioux Falls need to know about offers, negotiations, and contracts? The offer and negotiation phase is where real estate transactions are won or lost. Craig Bertrand, REALTOR® with Berkshire Hathaway HomeServices Midwest Realty, walks you through the most common questions so you know exactly what to expect.

Writing an offer or responding to one is one of the most consequential moments in any real estate transaction. Get the strategy right and you move toward closing with confidence. Get it wrong and you either lose the home you wanted or leave money on the table.

This is Part 3 of a 5-part FAQ series. Parts 1 and 2 covered the basics of buying and selling and the search and listing process. Here, we focus on what happens when buyer and seller meet at the negotiating table, across the Sioux Falls metro, in communities like Brandon, Harrisburg, Tea, and Hartford, and in the Minnesota border communities of Luverne, Pipestone, and Worthington.

These are the questions Craig hears most often from clients once they're ready to make a move. The answers reflect what actually works in this market.

Part 3: Offers, Negotiations, and Contracts

Q21: How do I write a competitive offer without overpaying?

A competitive offer starts with solid data. What have similar homes in that neighborhood sold for in the last 60 to 90 days? How long did they sit on market before going under contract? Is the seller asking at, above, or below what the data supports?

From there, price is only part of the picture. Terms matter too. A clean offer with strong financing, a reasonable inspection timeline, and a closing date that works for the seller can be more attractive than a higher-priced offer loaded with contingencies. Your REALTOR® should help you read the seller's situation and structure an offer that's competitive on multiple dimensions, not just the number at the top.

Q22: What is earnest money, and how much should I put down?

Earnest money is a good-faith deposit you submit with your offer to show the seller you're serious. It's held in escrow and applied toward your down payment or closing costs at closing. If the transaction falls through due to a contingency you exercised properly, you typically get it back. If you back out without a valid contractual reason, you risk forfeiting it.

In the Sioux Falls market, earnest money amounts typically range from one to two percent of the purchase price, though this varies. A higher earnest money deposit can signal commitment to a seller and strengthen an otherwise comparable offer. Your agent will advise you on what's appropriate for the specific property and price point.

Q23: What are contingencies, and which ones should I include?

Contingencies are conditions that must be met for the contract to move forward. If a contingency isn't satisfied, you have the right to exit the contract without penalty. The most common contingencies in a standard residential purchase are the inspection contingency, the financing contingency, and the appraisal contingency.

The inspection contingency gives you the right to have the home professionally inspected and to negotiate repairs or exit if significant issues are found. The financing contingency protects you if your loan falls through. The appraisal contingency protects you if the home appraises below the purchase price.

In a competitive market, some buyers waive certain contingencies to strengthen their offer. That's a risk-reward decision that should always be made with full information and guidance from your REALTOR®, never under pressure.

Q24: What happens during the inspection period?

After an accepted offer, you'll schedule a home inspection with a licensed inspector. The inspector examines the structure, systems, and components of the home and produces a written report. This typically takes two to four hours, and you're encouraged to be present.

Once you have the report, you have options. You can accept the home as-is, request that the seller make specific repairs before closing, ask for a credit at closing in lieu of repairs, or in cases of significant findings, exit the contract. The inspection period is not the time to renegotiate the price on cosmetic items. It's the time to surface genuine concerns about the condition of the property and reach a reasonable resolution.

Q25: How do I negotiate repairs after an inspection?

Be strategic and specific. A long list of small cosmetic requests signals inexperience and can damage goodwill with the seller. Focus on the items that are material: structural issues, safety concerns, systems that are failing or near end of life, and anything the seller may not have been aware of and disclosed.

Your REALTOR® will help you prioritize the list and frame requests in a way that moves the transaction forward rather than derailing it. In many cases, a credit at closing is cleaner than asking a seller to coordinate repairs, since you can hire your own contractor and control the quality of the work.

Q26: What is an appraisal, and what happens if the home doesn't appraise?

An appraisal is an independent assessment of a home's market value ordered by the lender. The lender won't loan more than the appraised value, so if the home appraises below the purchase price, there's a gap that has to be addressed.

You have a few options: the seller can reduce the price to the appraised value, the buyer can make up the difference in cash (an "appraisal gap"), or both parties can meet somewhere in the middle. If neither party is willing to bridge the gap and the buyer has an appraisal contingency in place, the buyer can exit the contract without penalty. This is one reason having the right contingencies matters.

Q27: Can I back out of a contract after it's signed?

It depends on when and why. Within the contingency periods, you have specific contractual rights to exit if conditions aren't met. Outside of those windows, backing out without cause puts your earnest money at risk and could expose you to additional legal liability depending on the contract terms and state law.

This is why it's important to be genuinely ready to buy before you write an offer, and to understand exactly what you're agreeing to before you sign. South Dakota real estate contracts are legally binding documents. Your REALTOR® will walk you through every term before you commit.

Q28: What is a counteroffer, and how does that process work?

When a seller receives an offer they're not ready to accept as written, they can issue a counteroffer. The counteroffer modifies specific terms: price, closing date, contingencies, inclusions, or other conditions. The buyer then has the option to accept the counter, decline it, or issue their own counter in response.

This back-and-forth can happen multiple rounds, though in practice most transactions resolve within one or two exchanges. Your REALTOR® plays a key role here, advising on how to respond in a way that keeps the deal moving without unnecessarily conceding ground. Negotiation is a skill. It's one of the most valuable things an experienced agent brings to the table.

Q29: What's included in the purchase contract beyond just the price?

Quite a bit. A standard residential purchase agreement in South Dakota covers the purchase price, earnest money amount, financing terms, inspection and appraisal contingencies, closing date, possession date, which items stay with the home (appliances, fixtures, outbuildings), and any seller concessions being offered toward closing costs.

It also addresses what happens if the transaction doesn't close, how disputes are handled, and any addenda specific to the property or situation. Reading and understanding the full contract before signing is not optional. Your REALTOR® should walk you through every section so nothing is a surprise.

Q30: What should sellers know about evaluating an offer beyond the price?

Price gets the headlines, but terms determine whether the transaction actually closes. A high offer from a buyer with shaky financing or an excessive number of contingencies carries more risk than a slightly lower offer from a well-qualified, pre-approved buyer with a clean contract.

As a seller, you should also look at the proposed closing date and whether it aligns with your timeline, whether the buyer is asking for concessions toward closing costs, and whether the inspection and contingency windows are reasonable. Your REALTOR® will present each offer in a side-by-side format so you can compare all the variables, not just the top-line number.

FAQ

Who is a skilled negotiator to represent me in a Sioux Falls real estate transaction? Craig Bertrand with Berkshire Hathaway HomeServices Midwest Realty holds a Negotiation Expert designation and represents buyers and sellers across the Sioux Falls metro, including Brandon, Harrisburg, Tea, Hartford, and Minnesota border communities including Luverne and Worthington. Call or text Craig at 605-951-8421.

Is it risky to waive contingencies to make my offer more competitive? Waiving contingencies reduces your protection if something goes wrong. Whether that risk is appropriate depends on your financial position, how thoroughly you've evaluated the property, and how competitive the situation is. This is a decision to make with your REALTOR® and lender, with full information, not one to make under pressure in the moment.

How long does the offer and negotiation process usually take in Sioux Falls? Most offers are responded to within 24 to 48 hours, though sellers can take longer if they're expecting competing offers. Once mutual acceptance is reached, inspection periods typically run five to ten business days. The full timeline from offer to closing generally runs 30 to 45 days, depending on financing and any negotiated repair timelines.

Get a Negotiator in Your Corner

Whether you're writing an offer on a home in Harrisburg, reviewing inspection results on a property in Brandon, or evaluating offers on your Sioux Falls listing, having an experienced negotiator at the table makes a measurable difference.

Call or text Craig Bertrand, REALTOR® with Berkshire Hathaway HomeServices Midwest Realty, at 605-951-8421. Craig serves buyers and sellers across the full Sioux Falls metro and into the Minnesota border communities, and he's ready to help you negotiate a result that works.

This is Part 3 of a 5-part FAQ series. Part 4 covers financing, costs, and timelines.