Course Login

Lost/Change your password?

Member Login

Lost/Change your password?

Register Now


Consumer OR Agent
1+1=2?    Maybe Yes No

Frugal Homeowner®

 

 

What Every Seller Should Know About Counteroffers


QUESTION:  We have our house on the market and just got our first offer.  It’s not quite what we’re looking for; but our agent is concerned that if we go the counter-offer route, we might lose the buyer.  What exactly are the risks?---LK

ANSWER:  To be an effective, successful seller, you do need to understand the pros and cons of counter offers.  So let's explore what a counteroffer is, how it works, and how you can use it to best advantage.

When counteroffers occur: Counteroffers are replies to original offers (as the name implies). Just like making a verbal counter-point to another person's statement, the counteroffer is a response to an original offer. For example, the buyer asks that you leave the washer and the dryer with the house. You decline and counter back to the buyer with the washer and dryer marked off of the personal property section of the contract. You have made a counteroffer.

Counteroffer snafu: It sounds simple. But there's one twist. A counter offer is an entirely new offer, one that the buyer doesn't have to accept. Any change, no matter how minor, voids the first offer, and the buyer is under no legal obligation to respond to the new offer. This means that even though the buyer first offered to pay full-price (in cash) for the house, you may have just killed the sale because you balked at leaving the washer and dryer worth $200!

Communicating your acceptance: There's an additional point to understand regarding offers of all kinds (counter or otherwise): The offeror (the person making the offer) has the right to withdraw the offer prior to it being accepted and that acceptance being communicated back to that offeror. This means that a buyer could withdraw the offer (with earnest money being returned) any time prior to receiving word that you accepted the offer.

For example, you are trying to decide whether or not to accept a buyer's offer when you receive a call stating that she is revoking her offer and purchasing another property. Or worse yet, you accept the buyer's offer, and, in your state of euphoria, forget to call her to relate your acceptance. Prior to hearing from you, the buyer could withdraw the offer.

When counteroffers make sense: Does this mean that you should never make counter-offers to a buyer? No, but make sure you know the price you pay if you do! The buyer doesn't have to accept the offer, can walk away from the sale---can even counter back at terms more in his favor and less in yours. This is the point that your real estate agent wants you to understand.  Make sure you weigh the pros and cons before proceeding and be ready to accept the consequences.

 



Share |