Making a Counter Offer
Counter-offer forms are far less complicated than purchase-offer forms, because you use them to fine-tune the terms and conditions of offers you get from prospective buyers. If an offer contains unreasonable contingencies, use a counter offer to propose that the buyer remove them.
Suppose that the buyers offer $175,000 for your house and want you to close 30 days after accepting their offer. Because you're asking $189,500, you think that their offering price is low. Furthermore, you need six weeks to relocate.
If everything else in the buyers' offer is fine with you, don't rewrite the entire offer. Instead, give the buyers a counter offer stating that you'll accept all their terms and conditions except that you want $185,000 for your house, and you need six weeks after the offer is accepted to close.
Define time frames with counter offers
Suppose a case in which a loan contingency gives the buyer 30 days to get approved for a mortgage. If the prospective buyers can't get a loan within 30 days, you have the choice of either giving them a few more days to get financing or putting the house back on the market. Either way, you're in control of the situation.
Good contingencies always have precisely defined time frames within which buyers must complete a specified action or drop out of the contract. Never accept an open-ended contingency. For example, if buyers want their parents to inspect your house but don't specify when that inspection will take place, counter them with "parental visit shall take place not more than 3 days after offer is accepted." Be realistic but brisk when you set time frames. You don't want your house off the market any longer than is absolutely necessary.
Sale before purchase contingencies
Think twice before accepting an offer that's subject to the buyers selling their present house before buying yours. This is the ultimate open-ended contingency. It stigmatizes your house by driving away other prospective purchasers who can't put their lives on indefinite hold while they wait to see whether or not the buyers sell their house.
If you accept a "subject to sale of buyer's property" contingency, counter it with a release clause giving you the right to accept a better offer if one comes along.
Pick your counter offer battles selectively
A counter offer is like a stick of dynamite, and if you're not careful, it can blow up your deal. Making counter offers is a great idea if you have a hot property. But if you haven't had bunches of buyers banging on your front door, think carefully. You need to sell your house and get on with your life. Follow these tips:
- Don't counter small stuff. Suppose that the price and terms are okay, but the buyers want to include your 10-year-old washer and dryer in the sale. You want to take the washer and dryer with you to your new home. You can always buy a new washer and dryer if the house sells. Buyers often act emotionally and then find reasons to justify their actions. If you accept the buyers' offer, they'll think how smart they were to have made it.
- Don't kill the messenger. If the offering price is way below your price, don't reflexively counter at full asking price. You and your agent may have overpriced the house initially, or market conditions may have worsened since you put the property up for sale. A low offering price from a prospective buyer may accurately reflect your property's current market value. Reanalyze your house's fair market value by examining up-to-date asking prices and sales of comparable properties. Don't blow away a realistic buyer with an unrealistic counter offer.
- Stay focused on your goals. Suppose that you want to move into a new school district before school starts. Although you don't want to give your house away, ask yourself whether delaying the sale is worth protracted haggling over who's going to pay for a couple of hundred dollars in repairs. Set your priorities and don't take your eyes off your goals.