The Ultimate Guide to the Counteroffer
This is a guest blog post from Tom Lipinski of the Tom Lipinski Team at Keller Williams Lakeside Realty.
Whether you are a buyer or a seller, counteroffers are all about good positioning and perspective. A counteroffer is essentially a rejection, with a new proposal going back to the other party. When an offeree receives an offer or counteroffer, they ultimately have three options – accept, reject or counteroffer. Buying or selling a home typically takes strategy, and there are a few ins and outs to negotiating the best price.
If you are a seller, being in a position of strength is critical. Sellers will often intentionally overprice their home to get the most financial return possible, and never consider that they may need to adjust the price as time passes. When the house sits on the market for 60, 90 or more days, the seller’s negotiating strength dwindles – they finally get an offer, and are not in a position of strength to counteroffer, because the house has been on the market for an extended period of time. When you receive a counteroffer, you want to be in a position of strength, and days on the market plays directly into that said strength. If a seller receives a counteroffer early in the process, let’s say three days after putting the house on the market, they are in a great position to make a counteroffer and get a higher sales price on their home. So, if you are a seller, great positioning starts at the very beginning with a market price.
When buying a home, the buyer’s main goal – in a seller’s market – is to find the lowest price that a seller is willing to accept. If a buyer goes too low, they will simply receive a rejection, or they will be beat out by other buyers. If the seller proposes a counteroffer, they will counter with the highest price that they believe the buyer will accept. If a buyer really wants to secure the home and beat out competitors, they can propose other benefits in their counteroffer, such as a quick closing date or an offer to pay the owner’s title insurance premium. When a buyer is writing a counteroffer in a competitive market, they need to be creative.
Whether you are a seller or buyer, it is important to not give offers or counteroffers to multiple sellers/buyers. This can result in an owner selling a house to more than one person, or a buyer buying more than one house. Retracting and getting out of this type of situation can quickly become unethical and time-consuming. If you are buying or selling a home, one of the most valuable things that a real estate agent could provide is the subtle art of guidance – how to position yourself to get the best deal possible. Buying or selling a home often takes strategy and research and should not be done blindly.
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