A real estate counter offer happens after a buyer has submitted their offer to purchase and the terms and or price are not agreeable to the seller. Normally, a counter offer states that the seller has accepted the buyer’s offer subject to the “following particulars.” Such as the items listed below:
- Complete consideration – which generally means a higher price.
- Increasing the amount of the earnest money deposit
- Refusal to pay for certain reports or fees
- Changing service providers
- Altering closing or possession date
- Excluding or adding personal property from the contract
- Amending contingency time frames
- Early release of deposits
- Fixing a buyer’s agent mistake
What’s a Normal Number of Counters to Expect?
Just as a seller can submit a counter offer to a buyer, a buyer can counter the seller’s counter, which will then become a counter-counter offer or Buyer Counter Offer #1. There is not a limit to the number of counter offers that can be submitted back and forth. Here is an example of five counters on a property listed at $415,000. The buyer had submitted an offer of $400,000. This was the result:
Counter Offer #1 from Seller to Buyer
Seller counters sales price to $412,000. Washer and dryer included without warranty.
Buyer Counter Offer #1 to Seller
Buyer counters sales price to $405,000. Washer and dryer included without warranty.
Seller Counter Offer #2 from Seller to Buyer
Seller counters sales price to $409,900. Washer and dryer excluded from sale.
Buyer Counter Offer #2 from Buyer to Seller
Buyer counters sales price to $407,500. Washer and dryers to remain as personal property.
Seller Counter Offer #3 from Seller to Buyer
Seller agrees to sales price of $407,500. Refrigerator, washer and dryer excluded from sale.
Finally, the buyer accepted the fifth counter.
How is a Counter Offer Rejected?
- Most purchase contracts provide a spot near the bottom for the seller to initial that the offer has been rejected.
- Sellers can also write “rejected” across the face of the contract, initial and date it.
- Most offers specify a date of expiration of offer in the event the seller chooses not to respond.
- The listing agent can contact the buyer’s agent to communicate that the seller will not respond due to the offer being unacceptable.
- Normally, sellers are not required to formally reject an offer in writing.
How is a Counter Offer Accepted?
If the counter offer is issued by the seller, the buyer can simply accept the counter and deliver it back to the party selected to receive it. Time is always of the essence. Counter offers hold an expiration date, just like purchase offers. This means the seller can accept another offer while the buyer is deciding whether to sign the counter offer. If that happens, the seller will typically withdraw the counter offer.
In closing, the outcome often comes down to just how much the home is worth. Is it worth the list price and is that market value?