Many home buyers don’t know how to make counter-offer on a house they intend to buy. This is because they don’t understand what making a counter-offer entails. 

It’s tempting to go beyond your budget, just because you are eager to buy your dream home. This is why a counter-offer helps you to make informed decisions which guides  you during the transaction process. 

In this article, you will learn what a counter offer is and how to make a counter offer. You will also learn the importance and how to respond to a counter-offer.

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What Does Counter-Offer Mean

A counter-offer in real estate is a form of negotiation made in response to an initial offer. It usually happens when the buyer or seller is not happy with the initial offer. 

The buyer can accept, reject or make a counter-offer again. Whether you accept or reject depends on your needs and desires. 

Knowing your budget and desires helps you know if an offer is good for you. It is also important that you check your financing options before deciding on the best offer for you.

When it comes to making a counter-offer, you must be well informed. This helps you to understand market situations and how to negotiate strategically.

How to Make a Counter-Offer On a House

Buying a home goes beyond simply making an offer. Sometimes, negotiations can take quite a while before both parties come to an agreement. 

Knowing how to make a counter-offer is necessary to buying your dream house. Here are ways to make a counter-offer;

1. The Seller or Buyer Can Negotiate the Price

A buyer makes a counter-offer on a house below the listing price. The seller may decide to accept or reject the offer. 

In cases of multiple offers, the buyers’ agents will be notified by the listing agent of the client’s options.

2. The Seller or Buyer Can Negotiate the Closing Date

You can negotiate the closing date with the seller or buyer. A seller may want to move the closing date closer due to financial reasons. 

The buyer might want to push back the closing for his or her own reason. In this case, the two parties will negotiate and pick a closing date convenient for both parties.  

3. The Buyer or Seller Can Negotiate Based on the Home’s Condition

If the home inspection results are not good for the buyer, it can affect the counter-offer of the house. 

This is one of the reasons you should get a home inspection. The buyer might ask for a drop in price or make a counter-offer for repairs.

The seller can decide to wave, accept or adjust the offer.

4. The Buyer or Seller Can Negotiate on the Appraisal

For a home buyer, appraisal is a homebuyer term you should be familiar with. If an appraisal is below the agreed sale price, it will affect the mortgage loan amount. 

The buyer will have to extend the closing in order to get the finances complete. 

How To Respond to a Counter-Offer on a House

How you respond to a counter-offer made on a house is important. It’s not something you rush to do. 

You need to be well informed before responding to a counter-offer. Here are strategies on how to respond to a counter-offer; 

1. Carefully Review The Counter-offer

Reviewing a counter offer on a house needs to be done carefully. Read and understand everything before accepting the offer. 

Going with an experienced real estate agent helps review the counter-offer with you. Your agent can help answer and explain any questions you have.  

In addition, you can involve a real estate attorney if there is any need for that. After reviewing, both parties can decide if they are satisfied with the offer.  

2. Consider If You Are Comfortable With The Contingencies

Check if you are okay with the home contingencies. In some cases, the seller might want the buyer to waive home inspection contingency. 

It means the buyer is responsible for the repairs after closing. This will cost the buyer additional expenses. 

It could be worth trying if it’s a seller’s market and the competition is high. However, if you are not comfortable, you can always reject the offer. 

Consider Home Inspection Results

When responding to a counter-offer on a house, home inspection results are important. They could show costly repairs for both parties. 

The seller should know how much they are willing to pay to mitigate the expenses. The buyer also should also know how much is within reason for the house.

Know When You Will Walk Away

Know when to walk away if the offer doesn’t sit well with you. Don’t be desperate to buy a house that will cost you more for repairs. 

Also, as a seller, you should know how much you want to gain from the sale. If the offer is not favourable, you can always walk away.

When both parties have reached an agreement, they will sign. It’s important that you involve your agent and attorney in the whole. They make sure that all documents are legal. 

Conclusion

Counter-offer on a house is important in the real estate world. It gives you the opportunity to adjust your terms and even negotiate better prices. This helps to reach an agreement that favours both parties. 

Whether you’re making or responding to a counter-offer, being informed and prepared is necessary. It ensures that you don’t overpay, under-sell, or miss out on the deal you want.

Consult an experienced real estate agent to guide you through the whole process. 

Frequently Asked Questions

How many counter-offers are normal?

There’s no given limit to the number of counter-offers to make on a house. A buyer and seller can have one or many counter-offers on a house.  The buyer or seller can settle with the best offer. 

Can you withdraw your counter-offer?

You can withdraw a counter-offer on a house. This is as long as you don’t sign a written agreement. 

Hence, it is advised that you don’t make multiple counter-offers on a house in writing. This makes it easy for you to go for the offer that you agree with. 

When should you accept a counter-offer?

You want to accept a counter-offer if it matches your checklist, whether as a buyer or seller. This can be budget, closing costs and contingencies agreement.  

What should you do if the seller rejects your counter-offer?

Your real estate agent is a valuable tool at this stage. If the seller or buyer rejects your counter-offer, your agent will find out why. They can help you make further negotiations and see if both parties can come to an agreement. 

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