If you’re new to buying or selling a home, you may not be completely familiar with all of the different terms. For example, you may not be completely clear on what a counter offer is, who makes it, and what you’re supposed to do when you receive one. All of that is important, since counter offers are a big part of buying and selling homes and other types of real estate. Here are some things to consider about counter offers, so you can feel confident in your real estate terminology and understand everything necessary to move forward with a transaction. Whether you’re buying or selling, it’s important that you feel comfortable with any decision you make, and being well-informed can definitely help with that.
1). How does a counter offer work?
When someone has a home for sale and a buyer wants to purchase it, that buyer will put in an offer on it. The seller will then consider whether to accept the offer, reject the offer, or use a counter offer. That is done by saying no to the buyer’s offer, but adding in what would be accepted. In other words, if a seller has a house that’s priced at $100,000 and the buyer offers to pay $90,000. The seller may make a counter offer of $95,000. The buyer can than either accept that offer or counter again. Sometimes one counter offer is enough, and other times the buyer and seller may go back and forth several times before they come up with a price they all agree on. The terms of the loan, such as who pays the closing costs, are also up for negotiation, and countering on those things as well as the price is common for some transactions.
2). Do you have to accept a counter offer?
When you’re selling a home, a buyer makes an offer, and you counter, the buyer doesn’t have to accept it. You also don’t have to accept the offer if the buyer counters back. There’s no obligation on the part of either party until they agree on a contract, and that won’t happen until an offer or counter offer is accepted. If you’re not comfortable accepting a counter offer, you can either counter back again or you can simply reject it. Either way is perfectly fine, although most sellers who want to sell and buyers who really want the property will try to work with each other as much as they possibly can. That can give both of them what they’re looking for and help get the transaction closed so they can move forward. That doesn’t mean you should accept a bad counter offer, though.
3). Can you make multiple counter offers?
Multiple counter offers are certainly possible. Especially if the buyer and seller are far apart on the deal in the beginning, but both want to work toward an agreement, it’s possible that they will go back and forth with counter offers several times. Just because a counter offer is made doesn’t mean the other party can’t request something different, effectively countering the counter offer. It can seem confusing, but your agent will help you work your way through the process whether you’re the buyer or the seller. That way you have the highest chance of being successful in your transaction. Just make sure you don’t accept something you really don’t feel good about. There’s no requirement to agree to a bad counter offer, just to close the deal. Another opportunity for a deal will come along if this one doesn’t work out.
4). Why haven’t you received a response to your counter offer?
When you’re buying a house and have put in an offer, the seller will probably counter. Then, it’s up to you to move forward. You can accept the seller’s counter offer, reject it completely, or counter it with a compromise. If you’re the seller and you haven’t received a response to your counter offer, you’re probably anxious. You want the deal to go through, and in order for that to happen the buyer needs to respond. If they don’t like your counter, they may just reject it and walk away. That means you’ll need to find another buyer, which can be frustrating if you thought you might have had your house sold. If you haven’t received a response to your counter offer yet, the buyer is probably thinking it over. They may be doing some research, talking to their agent, or sleeping on it to see how they feel about it the next day. Most contracts have a timeline in which they have to respond, or the deal expires.
Whether you’re a buyer or a seller, understanding a counter offer can help you feel more comfortable about the home buying process. It can also keep you in the loop when it comes to the start of negotiations. Unless a seller takes a buyer’s initial offer or decides to completely reject it, there will be at least one counter offer made. That can allow for the opening of negotiations that can lead to a fair deal for everyone, so it’s definitely worth considering. If you’re not sure about whether to accept a counter offer, some consultation with your agent can help you make the right choice. Then you’ll feel good about your real estate transaction and can move confidently forward.
2 Point Highlight
There’s no obligation on the part of either party until they agree on a contract, and that won’t happen until an offer or counter offer is accepted.
Whether you’re a buyer or a seller, understanding a counter offer can help you feel more comfortable about the home buying process.
