Counter offer in real estate - buyer vs seller negotiation

When receiving a buyer’s counteroffer as the seller, it is important to negotiate strategically to arrive at a mutually acceptable sale.

Here are key steps for the seller when dealing with counter offer:

Carefully Review the Buyer’s Counteroffer

  • Analyze proposed changes to purchase price, closing date, contingencies, included repairs, etc.
  • Determine which financing terms you are willing to accept, closing costs, change of posession date, new counter bid or else – compromise or reject.

Consult Your Agent

  • Get feedback on whether the counteroffer seems fair and reasonable.
  • Discuss the buyer’s motivation level and negotiation strategy.

Make a Responsive Counterproposal

  • Address any unreasonable requests in the buyer’s counter.
  • Include rationale for terms you won’t accept.
  • Propose workable alternatives and compromises.
  • Set a Deadline for Response
  • State clearly when your counteroffer will expire for maximum leverage.

Be Prepared to Negotiate Further or Walk Away

  • Have bottom lines on what terms you absolutely need.
  • If you reach an impasse, reaffirm final position.
  • Don’t settle for a deal that doesn’t meet your interests.

Stay Calm and Professional

  • Avoid emotional responses or haggling.
  • Keep negotiations cordial and businesslike.
  • Focus on shared goal of reaching fair agreement.

The key is balancing firmness with flexibility to achieve your objectives and close the sale.

You’ve spent months getting your home ready to sell, and you finally have an offer. But it’s not the full asking price – it’s a counteroffer from the buyer. How do you decide whether to accept or reject it?

As a home seller, you might be wondering how to make a counteroffer that protects your interests and gets you the best possible price for your home. Here are some tips from real estate experts to help you make a smart decision about counter offers in real estate.

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By George Nicola (Expert Stager)

Table of Contents

What is the meanining of counter offer

A counter offer is when the employer makes a new job offer to a candidate who has already rejected their initial offer. The counter offer typically includes improved terms and conditions aimed at persuading the candidate to accept the role.

To make a counter offer, the employer presents a new job offer with better compensation, benefits, job title, work schedule or other incentives after the candidate has turned down the original offer. The goal is to entice the preferred candidate to reconsider and accept employment.

Both “counter offer” and “counteroffer” are correct spellings when referring to a new offer made during real estate negotiations in response to an initial offer.

“Counteroffer” is more common in American English, written as one word.

“Counter offer” is more widely used in British English, written as two words.

What is and what is not a counter offer?

What is counter offer?

  • Counter offer is a new offer made in response to an initial offer on a property during negotiations between a buyer and seller.
  • Counter offer involves one party proposing new terms or conditions that are different from the original offer, with the goal of reaching a mutually agreeable deal.
  • Counter offer can include adjusted sale price, closing date changes, modified contingencies, seller credits.
  • Counter offer provides a chance for both buyer and seller to negotiate factors important to them in order to move the transaction forward.
  • Buyer has options to accept the counter offer, reject it, or make another counter proposal in response.

What is not counter offer?

  • Asking clarifying questions about an existing offer. Simply inquiring for more details or explanation does not constitute countering.
  • Verbal discussions. To be binding, counteroffers must be made in writing signed by the buyer or seller making the counter proposal.
  • Expired offers being resubmitted unchanged. For it to be treated as a new offer, rather than a counter, at least some terms would need modification.
  • An offer made after negotiations are terminated. This would be considered a new, separate offer rather than a counter within ongoing negotiations between buyer and seller.
  • Partial agreement on discrete items in an existing offer. There needs to be an overall counteroffer with modified key terms like price, contingencies etc.
  • An initial purchase offer on a property. By definition, there has to be a preceding existing offer by another party to constitute a “counter”.
  • Signed offers with all original terms left unchanged. These would simply be accepted, not countered.

Effective counter offers require strategic analysis, reasonable terms, compromise, skilled negotiation tactics. Counter offers should not be empty threats or unreasonable demands made without merit.

What issues can be negotiated in a counter offer?

The most powerful issue that can be negotiated in a real estate counter offer is sale price especially in downmarkets:

  1. Sale Price – This tends to have the most impact and urgency in counteroffer negotiations. Buyers may counter with a lower price to increase affordability or investment potential. Sellers may counter back higher to maximize profits. Multiple price counters are common before landing on an agreed sale price.

Additional issues that hold counteroffer negotiating power include:

  1. Closing Date – Adjusting the closing date through a counteroffer allows buyers or sellers to accommodate their moving or housing transition timelines.
  2. Contingencies – Introducing or modifying financing, inspection, or home sale contingencies can make an offer more appealing or firm during countering.
  3. Inspection & Repairs – Buyers can use inspection findings to request repairs or credits from the seller to offset costs through counteroffers.
  4. Concessions – Creative countering on closing cost concessions can bridge gaps in price standoffs.

While other terms like included items and earnest money can come into play, savvy negotiators recognize that sale price drives most real estate deals and counteractions. Skillful countering balances needs on both sides for a smooth closing.

When you receive a counteroffer from a home buyer - review and consider their position

When you receive a real estate counter offer from a home buyer, it’s important to take some time to review the document and understanding their position.

Although it may seem intimidating at first, counteroffers are simply an opportunity to negotiate terms and get the best deal for both parties.

A successful real estate transaction is not a one-way street; it takes back-and-forth dialogue, and both sides need to accept certain changes in order for the deal to move forward.

Taking the time to understand your buyer’s point of view before making an offer can help ensure that both you and your buyer are satisfied with the outcome.

When reviewing a counteroffer, consider including listing agents, financial specialists or solicitors before accepting the offer, if needed.

Their insight and advice can be invaluable during negotiations so don’t hesitate ask your real estate agent professionals to tap into their expertise.

After all, counter offer is an offer a seller may accept or not. Rejecting an offer is not always a negative thing, you can also make a new counter to one offer.
Also including the fact that the seller agrees to pay closing cost for home purchasing process in the contract may be a plus point. 

Example of counter offer (from a seller)

Scenario: A buyer makes an offer to purchase a house for $300,000. The seller disagrees with the price and feels that the house is worth $310,000.

Counter Offer with Escalation Clause: In response to the buyer’s offer, the seller makes a new counter offer of $305,000 with an escalation clause. This means that if another offer comes in higher than $305,000, the purchase price will automatically increase by $1,000 until it reaches the seller’s desired price of $310,000.

In this scenario, the buyer now has the option to accept the counter offer with the escalation clause, make a counter offer of their own, or reject the counter offer and move on to a different property. The negotiation process continues until both parties agree on the terms of the purchase agreement.

What does contingent sale mean and how it's linked to the counter offer?

In real estate, a contingent sale occurs when the sale of a property is contingent on a certain condition being met.

This can include anything from the sale of the buyer’s current home to receiving loan approval. Essentially, if the condition is satisfied within a specified time range, the deal will proceed.

When it comes to real estate deals, a counter offer occurs when the seller rejects the buyer’s initial offer and provides other terms. The buyer then has the option of accepting or rejecting the counteroffer.

So, in a contingent sale, the seller may submit a counteroffer in response to the buyer’s initial contingent offer, such as if the buyer’s offer is contingent on the sale of their current home, often called – chain.

The seller may propose to remove the contingency or extend the timeframe for its fulfillment.

The buyer is then free to accept the new offer or submit a counteroffer of their own.

Essentially, a contingent sale can influence a counteroffer since the parameters of the purchase agreement may need to be modified to accommodate the contingencies in the buyer’s initial offer.

Seek Professional Advice - Talk with a Real Estate Agent for Expert Guidance

If you’re a homeowner looking to sell your house, receiving a counteroffer can be an intimidating experience.

It’s important to keep in mind that while it might feel overwhelming or confusing, counters offer opportunities to negotiate terms. That can result in the best possible deal for both sellers and buyers, and there can be multiple offers after the initial offer.

With so much on the line, it’s highly recommended that you consult a professional real estate agent to ensure that you are making informed decisions and getting the most out of any counteroffers for your home on the market.

Not only will a real estate agent have the knowledge and expertise to talk through your options before the counter offer is rejected.

Expert agents also bring additional negotiating experience and insight on real estate counter offer etiquette which can help you strategize through any potential obstacles or difficult scenarios when closing a sale.

So don’t hesitate to reach out; an expert real estate agent is waiting to provide guidance every step of the way when selling a home!

Analyze Your Market - Look at Comparable Homes in the Area to Gauge Value

Selling your home can be a daunting task, and there’s no shortage of decisions to make. When you receive a counteroffer, one of the most important considerations before rejecting the offer will be gauging fair market value.

After all, it’s essential that you get the best deal possible while providing the buyer with an attractive offer for their dream home. To get a good benchmark on value, we suggest taking some time to analyse your local real estate market before submitting an offer.

counter offer meaning in real estate

Also a buyer may ask the seller to make a home inspection before the home buying process.

Results of this inspection may also help you anticipate if you need a different counter one.

Have a look at comparable homes in the area- by assessing their size, condition and upgrades- you can begin to piece together an accurate estimate of what potential buyers may pay for your home.

By gathering enough data through real estate trends, regional comparisons and local knowledge before the offer has been signed, this process should make it easier to weed out any lowball offers, minimize your closing costs and maximize your profits!

Consider Your Options - Should You Accept, Reject or Negotiate Further

If the counteroffer is too low, make a counteroffer of your own that is closer to your asking price!

When you receive an offer made in response to your original offer on your house for sale, it’s important to consider your options carefully.

A lower first offer may be reasonable or show a lack of interest, but it can also provide a good opportunity for further negotiation and an increase in the selling price.

If the counteroffer is too low, take the time to consider what makes sense to you and then you can make your own new offer that is closer to your asking price.

The buyer may decide on this second offer, or they may counter back again.

Whichever way the process goes, having a well thought out strategy will ensure that both parties find something equitable in each step of the bargaining process in this hot real estate market.

Consider you’re the buyer and try putting yourself in their shoes. This may make putting an offer or rejecting a counter one more rational. 

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Weigh Pros and Cons Before Choosing a Response

Reaching an acceptable sale price on your home can be a tricky process. After the offer comes, it can be difficult to decide what is best for you and your family and you may not know whether to counter or reject. 

It’s important to take the time to carefully weigh the pros and cons before choosing a response.

Consider factors such as negotiation tactics, long-term investments and costs associated with the transaction in order to make a well-informed decision that will ultimately benefit you in the end.

With the right preparation of counter offer work, you will empower yourself to achieve a favorable outcome on your property’s sale.

Be Aware of Common Strategies Used by Buyers’ Agents

Whether you are a first-time or experienced home seller, it pays to be aware of some of the most common strategies used by buyers’ agents in counter offer negotiations. Agents frequently try to use their knowledge and bargaining power to negotiate a lower purchase price for their client.

make a counter offer

Be sure that your counteroffer includes a realistic market value and fair terms, so you can secure the best possible deal on your home sale.

Make sure you understand the contract thoroughly, including all contingencies and other key points, as these could also potentially work against you during negotiations.

With proper preparation and knowledge of common negotiation strategies, you will be well-positioned to successfully navigate any counteroffer that comes your way.

For these situations you may need to find the right real estate agent or realtor to help you understand terms of the countering better in order for you to make the right decision to accept a counter offer or reject. 

Stay in Touch with the Buyer’s Agent Throughout the Process

Be prepared to negotiate back and forth until you reach an agreement that works for both parties involved.

Selling your home can be a stressful process, but staying in touch and being prepared to negotiate with the buyer’s agent through a counteroffer will help ensure you get the best deal out of it.

As the seller, you need to prepare yourself for this back and forth, as it is important to make sure that both parties agree on an arrangement they can live with.

To do this successfully, keep communication open between yourself and the buyer’s agent throughout the process—this way any changes or concerns can be discussed straight away.

Side note: Negotiating a counteroffer means both sides will have to compromise to reach an agreement that everyone is happy with so don’t be afraid to give a little in order to reach the best possible outcome.

What if the counteroffer is close to what you were hoping for?

If the counteroffer is close to what you were hoping for, accept it and move forward with the sale

If the counteroffer work for you, it may be in your best interest to accept it and move forward on the sale of your home.

This can help alleviate any delays that could occur by going back and forth trying to negotiate a better offer. Making a counter-offer may not work always and you may think that you cannot accept another offer, so choose another buyer.

Both buyers and sellers have a lot invested in this process so it’s important to study the offer in writing and assess if now is the time to accept before continuing negotiations which could ultimately lead nowhere.

It’s important that both parties come away from the transaction feeling satisfied.

Don’t be afraid to secure a deal that you feel good about but keep in mind there are other interested buyers in the market so don’t wait too long or you may find yourself starting all over again.

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Don't be afraid to compromise if necessary

Keep in mind that the goal is to sell your house, so don’t be afraid to compromise if necessary

The goal of selling your house is paramount, and it’s important to remember that.

Compromising in order to reach an agreement with the buyer is a key factor in the house sale process.

Things may not always go as planned, but negotiation is a key skill worth having – so never be afraid of going back and forth with a potential buyer to make sure you both get what you want from the transaction.

The buyer could make a low offer towards your home and as a house seller you may think that the offer is unacceptable.

As a consequence you may want to accept a better offer than the buyer’s original offer. You can also accept the offer that’s been made by the buyer.

Note: The home seller shouldn’t ever feel like they’re at a disadvantage because they’re trying to negotiate; every party in a real-estate deal needs to put something on the table to make it work out.

So have faith in yourself and don’t hesitate when compromises might need to be reached!

Negotiating after home inspection

How respond to a counter offer after a home inspection as a seller?

To respond to a counter offer after a home inspection as the seller:

Consider the buyer’s requests carefully and make a reasonable counter offer. Be prepared to negotiate on repairs and price to reach a mutual agreement.

If the buyer’s requests are excessive, explain what you can reasonably do and hold firm on what you cannot. You may need to walk away if you cannot find common ground.

To make a fair counter offer, suggest one or more of the below:

  • Prioritize critical repairs like roof, foundation, electrical.
  • Estimate costs to make repairs and closing costs.
  • Propose a credit or price reduction you are comfortable with.
  • Suggest splitting costs on certain repairs.
  • Decline cosmetic upgrade requests.
  • Provide repair invoices/estimates to support your counter.
  • Set a deadline for the buyer to respond.
  • Be open to negotiation to successfully close the sale.

Walk away if requests are unreasonable or threaten the sale.

How would seller respond to a low counter offer

To respond as a seller to a low counter offer after a home inspection:

Carefully consider the buyer’s position, but don’t accept an offer well below market value. Make a reasonable counter offer to reach a mutually acceptable sale price.

If the low offer is still within an acceptable range:

  • Counter at a higher price between their offer and your list price.
  • Justify your counter based on comparable sales and current market data.
  • Emphasize the value and benefits of the home.
  • Hold firm if you have competing offers or interest.

If the offer is unreasonably low:

  • Explain why you cannot accept such a low amount.
  • Provide evidence the offer is below market value.
  • Suggest meeting in the middle or walking away.
  • Remain calm and professional in the negotiation.

Be prepared to negotiate further or let the buyer walk away if you cannot agree. Do not accept an offer you are not comfortable with.

How a seller should respond to multiple counter offers

To respond to multiple counteroffers as the seller:

Carefully review all counterproposals and select the offer that best meets your needs. Respond to each buyer and negotiate the most favorable terms possible, depending on the market conditions.

When evaluating multiple counterbids:

  • Compare proposed purchase prices and consider how close each is to your listing price. Prioritize higher offers.
  • Review requested repairs and credits and determine which are acceptable.
  • Look at adjusted closing dates and possession timelines.
  • Assess strength of buyers’ financial standing and ability to close. Select the most qualified.
  • Notify other buyers once an offer is accepted and keep them as backups.
  • Work with your agent to negotiate the optimal counterproposal.
  • Make conditional counteroffers to keep backup buyers engaged if needed.
  • Act reasonably and professionally to avoid multiple counterbids falling through.

The key is to objectively weigh all factors to get the ideal sale terms while keeping all parties interested. Masterful negotiation can result in a win-win for you and the buyer.

What if a buyer counter a counter offer?

If a buyer counters a seller’s counteroffer:

The seller can either accept, reject, or make another counterproposal in response.

To decide if a counter to your counter is reasonable:

  • Carefully analyze if the buyer’s new counterproposal represents a sincere effort to reach agreement or if they are trying to unreasonably ‘nickel and dime’.
  • Factor in how long the home has been on the market and whether you can afford to have the sale fall through. Consider compromising if needed to get the deal done.
  • Consult your agent to ensure the buyer’s counter is in line with current market conditions and similar home sales. Don’t assume you must automatically counter again.
  • If the offer is reasonable, it may be strategic to accept it as-is and avoid further delays from an ongoing volley of counteroffers.
  • Make sure your counteroffer deadlines are clear so the buyer knows when their counter terms will expire.
  • Compare to other bids if you have competing offers.

If the buyer’s counter is agreeable:

  • Accept the offer, sign the counterproposal, and move forward with the sale.

If the counter is unsatisfactory:

  • Make another counteroffer with terms more favorable to you.
  • Hold firm on your non-negotiables.
  • Provide rationale for why you cannot accept their counter.
  • Suggest compromises to reach a mutual agreement.
  • Walk away if you cannot reach an acceptable deal.

The key is to negotiate reasonably and decide what risks losing the sale. Continued counters indicate a motivated buyer, but don’t accept less than you are comfortable with.

How respond to a counter offer after a home inspection as a buyer?

Stay calm, factual, and solution-focused. The goal is to negotiate a fair outcome for both parties. Hire real estate attorneys if significant complex repairs are needed.

Here are some tips for making a counter offer as a buyer after a home inspection:

  1. Prioritize the most important issues discovered in the inspection. Focus on significant defects like roof, foundation, mold, electrical, plumbing, etc.
  2. Get written estimates from licensed contractors on the costs to make the necessary repairs. This will justify and back up your requests.
  3. Determine the maximum amount you can ask for while still keeping the deal fair and attractive for the sellers. Don’t overreach.
  4. Outline the specific repairs and estimates in your counter proposal along with a requested dollar amount reduction in sale price to offset them.
  5. Suggest the sellers make a portion of the repairs and you take a partially reduced price if structural issues are minor. Offer to split costs.
  6. Set a deadline, such as 48-72 hours, for the sellers to respond so you can keep the deal moving forward in a timely manner.
  7. Indicate that you are willing to negotiate further within reason if the sellers refuse your initial counter. Be flexible.
  8. Make it clear you reserve the right to terminate the deal and get your earnest money back if you cannot come to an agreement. Do not issue empty threats.

What options does a buyer have after a seller submits a counteroffer?

When a seller submits a counter offer to buyer’s first counter offer there are 4 options, with the main one to make another counteroffer as a response:

  1. Make another counteroffer: The buyer can respond with their own counteroffer, proposing different terms. This continues negotiations between the buyer and seller. There can be multiple counteroffers back and forth until terms are agreed upon.
  2. Accept the counteroffer: The buyer can accept the terms of the counteroffer as proposed by the seller. This would create a binding contract between the buyer and seller.
  3. Reject the counteroffer: The buyer can reject the counteroffer, ending negotiations. The seller would then be free to consider offers from other potential buyers.
  4. Let the counteroffer expire: Counteroffers often have an expiration date. If the buyer does not respond by the expiration date, the counteroffer is considered rejected. Again, the seller would then be free to consider other offers.

It’s important buyers carefully weigh factors like the home purchase timeline, need for repairs, competing offers, interest rates, and overall budget goals when deciding how to proceed. Good communication with their agent ensures they make an informed decision. The priority is getting the best deal while still closing on the home.

Conclusion

It’s important to understand that a counteroffer is simply the buyer’s way of negotiating for a better price on the home.

As a seller, you should always be prepared to negotiate in real estate industry. Be aware of common negotiation tactics, and keep communication open throughout the entire process.

If the counteroffer is close to your asking price, consider accepting it and moving forward with the sale. The goal is to sell your house, so don’t be afraid to compromise if necessary.

Can you hire a negotiator to submit a counteroffer?

You can hire a professional negotiator to submit a counteroffer when buying or selling a home. Hiring a real estate negotiating pro to handle counteroffers can give you an experienced, objective advocate in the transaction. They help facilitate mutually agreeable terms based on their experience and knowledge.

Here are a few key points about bringing on a negotiator:

  • Real Estate Agents – Many real estate agents will take on negotiation duties for their clients as part of their services. They have experience with local markets and typical terms.
  • Real Estate Attorneys – Real estate attorneys can also negotiate on your behalf, ensuring your legal rights are protected through counteroffers. This is especially helpful for complex transactions.
  • Private Negotiators – You can also hire an independent professional negotiator who specializes specifically in real estate transactions. They work on your behalf to secure ideal counteroffer terms.
  • Represent You – The negotiator will handle communications with the other party, freeing you up from the emotional stress of countering.
  • Strategize Terms – A negotiator will help devise a counteroffer strategy aligned with your budget, needs, and bottom lines.
  • Add Leverage – In heated markets, having a seasoned negotiator submit counters can provide more bartering leverage.