To some a counter offer may just seem like you bartering for an object at a flea market. However, counter offers are useful to help both buyers and sellers get close to what they want from the transaction. Home buying is often stressful enough for many people, add putting in an offer on a property you really want and then worrying if the seller likes it. If they come back to renegotiate, do not worry your real estate agent can act fast to be a middleman for these negotiations.
What Is a Counter Offer in Real Estate?
Counter offers become part of the home buying and selling process after buyers make an offer on a house and the seller wants to change their deal to fit their sale goals. In the home buying process, a counter offer is an offer made in response to the original bid. When a seller receives an offer they have three choices: accept it, reject it, or counter. In return, if the seller makes a counter, a buyer can also choose to accept it, reject it, or counter back.
How Does Making a Counter Offer Work?
A counter offer may come from several different scenarios, and the countering process looks different depending on if you are buying or selling.
A seller can counter a buyer’s offer initially to change the purchase price or increase the money deposit. Sellers can also make counter offers for other reasons, such as changing the closing date or contingency periods. Sellers will typically communicate the terms of the counter offer through their listing agent, and may also put an expiration date on the counter offer. This allows them to speed along the process of selling the home.
A buyer can also counter a seller’s counter offer, there are no limits to the amount of counters you can submit as a buyer. Home buyers first create an offer that may be below the asking price. Another reason a buyer may counter is due to a home inspection reveals issues with a property, such as cracked foundation. You can ask the seller to take the price down in order to have to fix the issues you have found during the inspection.
3 Tips For Making a Counter Offer
Let’s take a look at a few negotiating strategies for those hoping to make a counter offer that the other party will accept.
- For sellers: Pay more of the shared closing costs. Sellers can offer to pay some of the Buyer’s closing costs. Closing costs usually run 3%-6% of the mortgage loan amount, making the buyer more inclined to accept and not counter back.
- For buyers: Increase the money deposit. The deposit is an important tool in a real estate transaction because it communicates to a seller that you’re serious about buying. Increasing the deposit can help make your offer more attractive. Normally, people throw down 1-3% of the sale price.
- For sellers: Exclude or even add personal property. Personal property, such as furniture and appliances, can be included in a home sale negotiation.
What If My Counter Offer Is Rejected?
If your counter offer is rejected, do not give up just yet. There are still options on the table, you can either walk and look for a new property or make another counter offer. Your real estate agent will be by your side to assist you with drafting the new counter offer if that is the route you decide to go with. The important thing to remember with sending in a counter offer is that once you do so the original offer is no good.
It’s important to collaborate with your real estate agent to improve your offer by tailoring it to the other party’s motivations or weighing your pros and cons. It’s through this process that you’ll determine whether you should look for a new home or a new buyer.
Contact Vanessa Auguste
Handling the negotiation phase of real estate can be long and stressful, especially when there is no traction with a deal that everyone is happy with. Having a real estate agent by your side to ensure that you are getting the best deal along with complying with the other party’s demands as well makes the difference. Vanessa is great with working with her clients to ensure that it is clearly communicated what they are looking for and want. Contact Vanessa today by giving her a call at 514-788-4444 or by filling out a contact form on her website!