A Real Estate Counter Offer: How to Work it and How Not to Blow It
Whether you are selling or buying a home, the listing price is agonized over from start to finish. Realtors will advise sellers of the comparative market analyses and hopeful “For Sale Buy Owners (FSBO)” will crash open houses trying to set just the right sale price for the home. Buyers will decide what they want and what they can afford; then seek out realtors they believe can find a bargain. But despite all that planning and agonizing, realtors report that a large percentage of offers result in counter-offers. What do you do then?
Rejected? Not Really
Realtors will tell you that some homeowners take a low offer on their house a bit personally. While that may be true, counter offers are generally a reasonable way of negotiating the price the buyer wants to pay, with what the seller wants to get. And unless you went the FSBO route, you don’t even have to deal with it directly- leave it to the realtors.
Many homebuyers and sellers choose to work with realtors for this very reason; they can let a professional negotiate terms and deal with tedious paperwork. Realtors report that most counter-offers may be issued to negotiate: a higher price (total consideration), a different time frame, paying service providers, a change in closing date, money down, or amenities included in the sale. According to the National Association of Realtors, people include anything from curtains to several thousands of dollars in their counter offers. Realtors in various states can educate you on laws governing counter-offers. There could be one or five in a given situation.
Deciding whether to dicker over a couple of thousand dollars, or who will keep the appliances, can be a decision that throws first time buyers or sellers into a frenzy. Keep these tips from professional realtors in mind.
Keep Your Eyes on the Prize
Realtors say that the homeowners who are happiest with their buying and selling experience were flexible, but had clear priorities. For example, realtors recommend that you have an acceptable range around your listing price that you will feel good about selling the house for. (Or paying for it). Then be flexible. Maybe the offer is $2 thousand lower than the seller wanted. This is a good time for a counter-offer that could propose more earnest money, or the exclusion of some personal property. Realtors will tell you that the seller is not required to respond to an offer at all. But if the realtors involved understand that both parties really want this sale to work, they will communicate that and help work out a mutually beneficial deal. Yet another reason that homebuyers and sellers need to choose realtors carefully. Try to view counter-offers as an opportunity for both sides
to get what they want, and to leave the table happy.
To take another spin on this:
Whether we will admit it or not, we all think we are pretty clever. This can manifest in many ways. In real estate, it often happens when a seller blows their counter offer to a buyer.
A real estate transaction comes around in a time tested manner. The seller woos buyers until one is enticed enough to make an offer on the property for sale. The seller will rarely agree to this offer. Instead, the seller will make a counter offer that the buyer must then decide to act upon. This process can go back and forth a number of times depending on the particular issues being negotiated.
Although the offer procedure can bounce back and forth like a ball in a tennis match, the first return of serve by the seller is key, to wit, the first counter offer. More than a few sellers will make an awful mess of it and kill the deal. This often occurs because they are offended by the initial offer from the buyer. Instead of correctly viewing the situation as a business transaction, they view the offer as an insult to the hard work they’ve put into their home, their style and so on.
When this occurs, the seller gets that gleam of cleverness in the eye when preparing their counter offer. The goal is no longer to get a deal done. Now it is to zap the buyer back with an indirect insult. A classic approach that is not really particularly clever is to counter on price, but only drop the price by one to two thousand dollars. It is essentially a way to give the buyer the metaphysical middle finger if you will.
Alas, the emotional satisfaction of taking this approach with the counter offer soon passes. Reality sets in. The seller is expecting the buyer to “get serious” and make a “real offer.” Instead, the buyer does nothing. Why? The buyer has moved on to other properties! Yes, the seller has just chased off the only real prospect he’s had in a month or two in this ice cold real estate market. Clever indeed!
If you are going to be selling your home in this market, you need to accept some basic facts. It is a buyers market. This means you are going to get low ball offers. Everyone knows the market is slow. Divorce yourself from your emotions when dealing with this situation. Objectively evaluate the offer made and make a reasonable counter offer if necessary. The buyer has the leverage in this market, so figure out your bottom line and negotiate anything you can above it.Source: www.selfgrowth.com