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What do you do when counteroffering?
A counteroffer in the home buying process refers to a return offer given by the seller in response to the original bid. When a seller gets an offer, they can choose to accept, reject or counter. In return, if the seller makes a counteroffer, a buyer can choose to accept, reject or counter it.
If you’re selling your home, you’re going to have to get comfortable with the concept of negotiation or you’ll forfeit money and conveniences for the sake of being nice.
Counter offers are your chance to secure a contract for the price you want on your terms, make decisions on where you’re willing to compromise, and find out if potential buyers are willing to play ball.
Once the buyers of your house have made a purchase offer, you’re dealing with one of three cases:
- You accept the offer with no changes or conditions
- You present a counter offer
- You reject the offer and move forward
A counter offer will just about always touch on three main overarching factors: price, convenience and timing.
Sellers typically shift this in one of two directions: countering with their original asking price or presenting a price between the buyer’s offer and that original asking price. Oftentimes buyers ask sellers to assume all closing costs. This sometimes works in a buyer’s market, but a seller may come back with a simple no or agree to contribute a certain amount toward closing costs, meaning that the buyer will be financing his or her costs through their mortgage loan. A buyer can show you the money by placing an earnest deposit and this makes their intentions to purchase your home clear. Keep in mind that, from the seller’s perspective, a larger deposit is preferred over a smaller one because it indicates a buyer is serious about following through.
Some contingencies are standard (inspections, appraisals, title, and financing) and a seller won’t typically fight them unless they’ve got all the leverage. A longer shot is the buyer making the purchase contingent based on the sale of their existing home—this is a fairly common contingency but more likely to be negotiated.
If you as the seller are going to counter the above asking price, you had better be confident that the property will appraise for that amount. Should it not appraise, your buyer will not be able to get their loan approved, and then you will find yourself having to decide between one of two routes: asking the buyers to bring more money to the table or lowering your asking price.
You may still need to negotiate on who pays for the title search and whether you’ll include a home warranty, and terms like closing deadlines and the move-out date before you’re ready to sign on the dotted line.
There is no universally accepted law regarding multiple counters. As the seller, you’re also risking losing a good buyer by doing this if they decide the situation is too risky. As soon as buyer and seller come to a final agreement, they’ll both need to sign the contract, likely using DocuSign or another similar online electronic-signature tool. That needs to happen immediately in order to lock in that offer as most counters have an expiration date.
For more information on counteroffers on Marco Island real estate, contact me at any time.
Posted by Guy Amato on
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