When you’re in the process of selling your home, negotiation is likely going to be part of the equation. Last year that might not have been the case, with many homes receiving multiple offers and ultimately selling for over the asking price. Now, with interest rates stubbornly high, sellers are facing a different situation in many parts of the country.
That means negotiations are back.
A counteroffer is a tool that can help you get the price you want or at least get closer to it.
If a buyer submits an offer on your home, you have a few situations you might be facing. You could accept their offer without any changes or conditions. You could present a counteroffer, or you might reject the offer altogether.
What Are the Changes You Could Make in a Counteroffer?
If you go back to a potential buyer with a counteroffer, you might be contesting a few key things. The first is the price. A seller might counter with their original selling price, or they could come in somewhere between their price and the buyer’s offer. If you counter with your original selling price, you’re signaling to the person who put an offer on your home that you’re not willing to negotiate on price.
If you counter with a lower price than what your home was on the market for, you’re indicating you will negotiate.
Then, the buyer might agree to your proposed price or continue to negotiate.
Another part of an offer you could counter as a seller would be the closing costs. Buyers might request the seller cover closing costs, at least partially. Sellers can say no, or agree to contribute a certain amount, but then the buyer will finance some or all of these costs in their loan.
You could counter an offer based on the proposed closing date. The original offer might have detailed a 45-day close from the acceptance, but if you’re the seller, you could want more time before you have to leave your home.
There are also contingencies buyers might request, some of which are standard and you’re less likely to fight, like inspections and appraisals, but others you might counter. For example, some buyers will submit an offer that makes their purchase contingent based on the sale of their current home.
Countering Above Asking Price
Again, if you were selling your home just last year, countering an offer above your original asking price might not have seemed far-fetched. Now, that’s not necessarily the case. The market has to be able to justify you countering an offer with one that’s above your own asking price, and it’s unlikely that justification exists right now, with rare exceptions.
Are Counter Offers a Good Idea?
If you’re thinking about countering an offer, it makes the original offer void.
You could hesitate to make a counteroffer, with the worry that you’ll lose the sale altogether.
It’s important that before you make a counteroffer, you talk to your agent about it if you have one and thoroughly consider the local market, you’re in. If you’re in a competitive real estate market, as a seller, a counteroffer can be smart. If you’re not, you run the risk of losing a deal.
A buyer’s market is when there are a lot of houses for sale, and the ones on the market aren’t selling that quickly. If you counter someone, especially too aggressively, a buyer in these situations can easily move on.
Even if you’re in a seller’s market, if you’re too aggressive with a counteroffer, it could cause the buyer to walk away from the deal.
Yes, negotiations are important in real estate, but there’s such an emotional component to the whole process that you want to be careful. From a buyer’s perspective, you don’t want to offend the seller with a ridiculously low offer, but as a seller, you also want to avoid being frustrating or unreasonable.
Sometimes a seller will think they should counteroffer no matter what because the worst thing that can happen is the potential buyer says no. In reality, the worst outcome is that the buyer leaves the deal completely.
A counteroffer can be a valuable negotiation tool but should be used cautiously, with an eye on the local conditions of the real estate market.