How to Counter an Offer in Real Estate

Regardless of what you may have been told, it is important to understand that in real estate — everything is negotiable. If you’re a first-time home buyer, entering the world of counteroffers and negotiating property price can be a bit uncomfortable, if not downright intimidating. When you go into the process with a good handle on the proper etiquette and what you can expect from the other parties, you’ll be in a much better position to propose an effective counteroffer and get yourself the price you deserve.

This process should always be facilitated with the assistance of a qualified real estate agent. The real estate agent is a professional with experience over these transactions and can advise you on how to counter a potential offer. The real estate agent works on commissions or commission advances, so it is in their best interests to help you secure a fantastic offer.

Learning the ins and outs of counter offering just requires a bit of time and attention. Here’s a guide to understanding the process of how to counter an offer in real estate:

1. How does the process of a counteroffer unfold?

The first step in any real estate counter offer is a seller determining that they would like to sell their property and assigning a certain asking price to it. It is then up to potential buyers to make an offer, which in many cases will be lower than the initial asking price. Either the seller is eager to sell so they accept, or the process of formulating a counteroffer begins.

2. What are the factors involved?

Whether or not it is smart to present a counteroffer depends on several different things. In some cases, it will be clear that the current local market is geared towards either buyers or sellers, and it is therefore skewed in an advantageous way for one party.

Regardless, the seller can always choose to accept the offer as presented, decline the offer, or make a counteroffer to close the gap between the asking and offering price.

3. Is there an art to negotiation?

Yes. Successful negotiation requires the mastery of different tactics, a strong ability to read the other party, and a keen sensitivity to when it makes sense to push and when it is best to back off. Best left to the experts, it is wise to leave negotiating to an experience real estate agent. They are in the best position to get the best price possible without jeopardizing the completion of the sale.

4. What does a counteroffer include?

The terms and conditions of a counteroffer can vary a lot. In some cases, the request might be a more nuanced explanation of the terms of the offer or simply an appeal for more information. In order to ultimately finalize the counteroffer negotiations, the buyer and seller need to accept the terms with no other conditions or modifications.

5. How long does the negotiation process last?

Although it always depends on the specific situation, negotiating in real estate is a process that could go on for weeks or even months. Legally, there are no restrictions indicating how many counteroffers can be placed during negotiations.

In an ideal countering scenario, each offer should present a price closer to what the other party wants, or with concessions to make up for money. It is generally the responsibility of the real estate agent to provide advice as to what the next step should be and when the negotiations should be terminated.

6. What are common negotiation tactics?

Although each situation is unique, there are some common negotiating tactics that buyers tend to use when producing counter offers. These include things like boosting their earnest money deposit, changing service providers or modifying contingency time frame.

Negotiations could also include alternating the closing or possession date and excluding or adding personal property from or to the contract. In some cases, an earlier release of deposits may be requested or simply an overall increase of sale price.

7. What are common negotiation mistakes?

To present a successful counteroffer, it is important to study all relevant factors. Things like contingencies, closing cost splits, or an extended (or shortened) timeline should all be taken into consideration.

Despite the fact that tensions may be running quite high, it is important not to let emotions take offer and interfere with the process. It is also worth remembering that your offer might not be successful and that there are several reasons to reject an offer.

8. Does an offer need to be formally rejected?

In the event that the counteroffer is unsuccessful, it will usually be stated in writing on the contract. Typically, offers are accompanied by a date of expiration of the offer if the seller decides not to respond.

It is possible that the listing agent can email the buyer’s agent, or pursue some other kind of informal communication, to convey the fact that the seller will not respond because the offer is unacceptable. It is not legally required to reject an offer in formal writing.