You’ve already done the three most important things, got a realtor, have a listing price and put your home on the market. Here comes the negotiations and Counter Offers when Selling a House. There must have been several buyers and at least one or two have been very fund of your home. It is most likely that you will have a buyer that is interested in your home and will make you an offer. When you do get the offer there might be one problem, it might not be exactly what you were expecting. The price could be low and you might think that you will never reach closing. Negotiation and counter offers are just a normal process of selling your home. With a little help you can reach a deal you might like. And here is how you get there.
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Receiving an offer
A buyer must fill out a document called a residential purchase agreement in order to make an offer. The pre-printed contract is not legally binding until both of them agree to the terms and signs the contract. Until you sign, the document is just an offer, nothing more. The buyer encloses all terms they would like you include in the deal, including: the price, the down payment, who will pay the closing costs, any contingencies, such as a finance contingency if the buyer needs and mortgage finance in order continue the deal. If you think the offer is good for you, you can accept it by signing the document. After you’ve signed the document, the offer will turn into a binding purchase agreement. Here the offer will turn into a binding agreement. In this phase, none of the parties can cancel the deal unless the contract lets you. An example can be when the buyer encounters a problem in the house and doesn’t want to pay for it. Here you can have two choices, reject the offer or try to adjust. This is called a counter offer.
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Making a counter offer
Just like the offer, the seller’s counter offer is made on a pre-printed document. Here is where you can change the terms a buyer has suggested. An example can be if you want to raise the price offer on your home. To make it a binding contract, you must sign the counter offer and have it delivered to the buyer or to their agent. Once you have done this:
- Here you have rejected the offer the buyer has suggested. If you fill a counter offer, the buyer’s original offer will automatically cancel. You can’t go back and accept the original offer.
- The counter offer is a completely new offer.
- They always have an expiration date. You set the expiration date, but it is recommended to give the buyer time to think about your proposal.
If they don’t respond by the expiration date, the counter offer will expire. Here you have fallen out of negotiation with the buyer. The negotiations will only by reactivated when the buyer submits a new offer.
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What the buyer does next
When the buyer receives the counter offer, they have three choices:
- They accept the offer. The buyer signs the counter offer, making sure it hasn’t expired and delivers the document.
- They can reject the offer. Here the deal is off the table and will only by reactivated when the buyer makes a new offer.
- They can counter the counter offer. Here they will make a second counter offer, or keep going until you can reach a deal. It is not very likely to have
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When you should counter offer, and when you should not
If you have a real estate agent, they will know what to do. Since they have counter offers all the time, they will know if the offer is good or not. The agent will do his/her best to meet your price expectations. If the offer is very unreasonable, they will recommend you submit a counter offer.
Even if you make a reasonable counter offer, the buyer might not agree and you could end up with no deal. Since there are multiple homes for sale, the buyer may want to do two or three counter offer to secure their perfect home. Your agent may also investigate the buyer’s motivation for buying the house. This way you can figure out what the buyer want and secure the deal.
It is very likely that the buyer might like one offer more than the other. You should listen to your realtor and do as they say. If you have a willing buyer under contract it is more valuable than not having anything. Are you thinking on selling your home?
Let’s have a chat, even if it is still early. We have a team of experts that can help you. You can use our Home Value Estimator and check what your home might sell for. Text us any information at: (210) 405-8622
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