When negotiating to buy or sell a home, you will, at some point, be in the negotiating process – the offer and counter offers.
Most people understand what an offer is. As a buyer, you make a decision what you’re willing to pay and you make an offer to the seller. As a seller, you receive an offer from your potential buyer and then have three choices – accept, reject or counter.
What is a counter offer?
During the negotiations, you are not required to respond after receiving an offer. Typically, the offer states a time frame for your response, after which the offer automatically expires. Most often, rather than accepting or rejecting the first offer, the seller will instead make a counter offer.
Counter offers are a normal part of the buying/selling process. A counter is perfectly acceptable. The counter offer is where the negotiations really begin and the strength, or lack of, the buyer’s interest in the home becomes known.
The seller is presented with an offer. He/she responds with a counter offer because the offer was unacceptable. The counter revises the initial offer. Responding with a counter offer is a way to decline a previous offer while continuing negotiations.
The seller may counter with a higher price, and/or may change some of the terms of the offer. Other than price negotiation, they may ask for a higher down payment, need an earlier closing date, refuse to leave the appliances, etc. Counter offers are considered new offers and the process starts over with each new counter.
The buyer may accept or they may make adjustments and counter the counter offer (making theirs a second counter offer, or counter offer Number 2). There is no limit to the number of counter offers that can go back and forth. As with the original offer, no response is required to a counter, so they contain expiration times just like the original offer to purchase.
A counter offer is not an outright rejection of an offer. The seller and the buyer are continuing the negotiations, which is good! The goal is to keep the counter offers going because, as soon as anyone stops countering without an acceptance, the deal is dead.
Typical response time for an offer or counter offer is twenty-four hours. If you make an offer or counter offer and change your mind, you can back out. You are allowed to withdraw your offer as long as it has not yet been accepted. Once acceptance is communicated to you or your agent, and/or to the other party and their agent, you have a contract.
You never have to accept an offer. If you do not agree with what they are requiring from you, you are within your rights to end the negotiations.
Agents must present to the seller any legal offer made in writing that is accompanied by a deposit check. An agent can never refuse to present an offer because he or she feels it is too low. If the seller receives an offer they find offensive, they can choose to simply end the negotiations.