Counter Offers – A Double Edged Sword
December 22, 2018
Everything in real estate is negotiable. As a buyer, you can use a counter offer to save thousands of dollars by asking if the seller is willing to adjust the sales price, adjust the closing date (to mesh with your schedule and save yourself from having to stay in a hotel), make repairs, or agree to include personal property (washer/dryer, RV, bigscreen TV, etc).
Whenever you try to make a change, it is called a counter offer. The previous document will become void and the seller has 48 hours (unless otherwise specified) to make a decision concerning the counter offer. This can go four different ways.
They may accept the counter offer. That means both parties agree to the new terms and you have a legally binding contract. You are on your way to purchasing your new home.
The seller may reject the counter offer. This usually happens if they are offended and feel that the counter offer sales price is too low or asking for too much.
The seller may also counter your counter the offer. In this scenario, they are still interested in keeping the dialog alive. But, they wish to make another adjustment to your proposal. This gives you 48 hours to decide what to do.
With a hot real estate market, the seller may also elect to not respond to the counter offer. After 48 hours, technically the counter offer is void. But, often they know the buyer is still probably interested and would gladly purchase the home anyway. So they keep the counter offer in their back pocket and hope another better offer comes in.
A mistake many buyers make is to think they can ask for additional concessions just to see if the seller will accept it. If the seller does not agree to the counter, they think they can easily go back to the previous offer. This is not true. Once the buyer tries to counter the offer, the old offer is dead. If the seller does not agree to the counter offer, both documents are dead and the negotiations are over.
Moral of the story, be very careful with making counter offers. It is tempting to test the waters with one more counter to potentially save thousands of dollars. But, this can backfire on you. Consult your real estate agent to find out whether or not attempting a counter offer is wise. If the terms of the current offer are close to what you want, often you are better off to just accept the current deal as it stands.