How to Make a Good Counteroffer on a Home
Back and forth, back and forth--that is how offers on a home go sometimes. A house sale is not as straightforward as going into a store and buying a product. It is a negotiation, and the factors that influence that negotiation can be quite complex. If you are in the middle of a house sale and your buyer has made an offer that does not work for you, how do you make a counteroffer that is more to your liking and likely to be accepted by a buyer?
Decide How Far You Will Go
If you are not willing to do a lot of give and take in your home negotiation, let your real estate agent know. Perhaps money is very tight and you really do need to get a specific price for the home. Maybe you need to stick to a specific closing or possession date because you are moving and need the funds. Know which factors are non-negotiable and set up your home pricing and listing with these parameters in mind.
What Could Be Disagreeable?
The first thing you need to do when you are making a counteroffer is to really consider what is not agreeable to you about the original offer. These factors could include:
- The price
- What is included in the price, such as personal property
- The deposit, or a request for an early release of the deposit
- Changes in dates or time frames, such as the possession date
- Making amendments to the original offer of sale
- Mistakes made by buyer's agent within the offer
Should You Be Insulted By a Lowball Offer?
What is a lowball offer? That depends, but most realtors believe that 20 to 25 percent below the listing price is considered a lowball offer. Instead of getting annoyed and insulted, simply reply with a much higher counteroffer or politely reject the offer, unless you would like to negotiate. If you want to negotiate, it is a good idea to ascertain from the buyer why the offer was so low. The more information you know, the better your negotiating position will be.
Often, offers are about the total price, but changing some of the other elements of the offer can help buyers move on the price as well. For example, if you are selling your home for $400,000 and the buyer wants it for $370,000, you may not be happy with that price. However, you can see if your buyers will budge on the price if you throw in some incentives to help with their cash flow. These can include:
- Paying homeowners' association fees for the year
- Offering a subscription to a nearby amenity, such as a golf course
- Reducing the cost of caring for the property by giving them a gift of a year of lawn care or snow removal
- Paying some of the closing costs
- Giving a moving or renovation allowance
- Providing a warranty
When Do the Counteroffers Stop?
The counteroffers stop when you have either decided to make a deal with a buyer or one of you decides that the negotiation is not going to work. There is no limit on counteroffers. They are part of a normal house sale negotiation, and although they might be uncomfortable for some, they do work to ensure that both parties are satisfied with the deal.
At Open for Homes, we are here to help you make the best possible decisions as you negotiate a home purchase or sale. Do you want to learn more about buying and selling your home? Take a look at the blog at Open For Homes for more insight.