Offers, Counteroffers and Negotiation

What is an offer?

When you put your home on the market, you are essentially making an offer to buyers: for a given number of dollars and other terms they can acquire the home. Buyers, in turn, can respond with several options:

  • accept the offer
  • decline the offer
  • make a counteroffer

The process of making offers can vary, but typically, the buyer’s agent will present a written offer to the seller through the seller’s agent. The seller, in turn, may accept the offer, decline it or make a counteroffer.

What is a Counteroffer?

A counteroffer is nothing more than a new offer with different terms. Offers and counteroffers reflect the back-and-forth activity of the marketplace. It's a common, efficient and practical process - but one that must be managed carefully. Time is often an issue at this point in the negotiation process, so remaining in close contact with your Realtor® is critical so that any proposed changes can be quickly reviewed.

What is an Acceptable Offer?

The goal of every seller is to have a line of buyers outside the front door, each bringing higher and higher offers. And while this has been known to happen, in most markets there is some balance between the number of buyers and sellers. To determine whether a buyer's offer is acceptable, the seller should consider the following questions:

  • Is the buyer’s offer based on reasonable comparable market data or is the buyer “bottom feeding”?
  • Is the buyer well-qualified financially to close the transaction? Do you have the buyer’s financial information (BFI) form and letter of pre-approval from a reputable mortgage lender?
  • What are the terms of the buyer’s financing? How much of a down payment and how much “earnest” money is the buyer presenting with the offer as a show of good faith?
  • Has the buyer requested a “seller assist” or other credits that will reduce your bottom line profit?
  • How will your bottom line be impacted by the carrying costs for this home if you must continue to market it for several more months?
  • What if several offers are received? Do you choose the higher offer from the purchaser with questionable finances who may not be able to close, or a lesser offer from a buyer with pre-approved financing?
  • What are the contingencies and how long are the in effect? What if the contingencies are not satisfied?

I will work with you to carefully review all offers, consider marketplace options and give you the support and information you need to decide whether an offer is acceptable based on your goals and priorities. The decision to accept or reject an offer is yours and yours alone as a seller – as your Realtor®, you can rely on my experience and knowledge to help guide you through the decision-making process.

Contingencies and “Subject to” Clauses

Buyer offers often contain contingencies or “subject to” clauses that must be met before the contract is considered binding. Contingencies can include the following:

  • approved financing
  • buyer selling an existing home
  • satisfactory home inspection report
  • test results for environmental factors including radon, mold and water quality
  • termite inspections
  • easements
  • liens

Any buyer contingencies should have a time clause, limiting the contingency to a specified period.

How Do You Negotiate?

No aspect of the home buying process is more complex, personal or variable than the negotiation between buyers and sellers. This is where the value of my experience as a Realtor® is clearly evident: I know our local communities, I’m familiar with the comparable sales in the area, and I have extensive experience negotiating real estate transactions.

Real estate bargaining typically involves compromises by both sides. It's not war; it's not winner-take-all. Instead, negotiating should be seen as a natural business process: buyers should be treated with respect, and sellers should never lose sight of either their best interests or their baseline transaction requirements.

There are a lot of considerations, not just price, in making and negotiating offers. As an experienced Realtor®, I can guide you to a win-win negotiation.