When buying a home, you may receive a counter-offer from the seller. This can be frustrating, but it’s a natural part of the negotiation process.
It is said that knowledge is power, but that’s not quite true. Knowledge only gives you power when you put that knowledge into practice. So, in this article, we’ll cover everything you need to know about the offer negotiation process, how you should handle a home seller’s counter-offer, and what you should keep in mind as you move forward.
First Things First, Check Your Expectations
The first thing to remember is that the seller is under no obligation to accept your initial offer. In fact, it’s quite common for sellers to counter-offer, so don’t be surprised or offended if it happens to you.
It’s also important to keep your expectations in check. If you’ve been looking at homes for a while, it’s easy to get attached to a particular property. But it’s important to remember that there are other homes out there and that the seller may not be willing to meet your needs or wants.
If you’re not sure what you should expect, ask your real estate agent for advice. They’ll be able to tell you what’s typical in your market and help you set realistic expectations.
Now, let’s move on to the counter-offer itself…
What are Common Counter-Offers Sellers Make?
There are a few different types of counter-offers that sellers might make. While there is any number of things that can affect the terms of the purchase, some of the most common include:
- Increasing the earnest money deposit
- Changing the home sales price
- After a home inspection
- Modifying the closing date
- Altering the possession date
- Demanding a greater share of closing costs from you, the buyer
Keep in mind that these are just some of the most common requests. The seller may ask for other things as well.
It’s also important to remember that the seller is under no obligation to agree to any of your requests, so be prepared to negotiate.
What Should You Do When You Receive a Counter-Offer?
First of all, don’t panic. It’s normal to feel a little bit disappointed or even angry when you receive a counter-offer, but it’s important to keep your cool.
The next step is to review the counter-offer and decide if it’s something you’re willing to accept. If it is, then great! You can move on to the next step in the negotiation process.
But if the counter-offer isn’t something you’re willing to accept, then you’ll need to make a decision. You can either:
1) Counter-offer with a new price
2) Walk away from the deal
3) Renegotiate on other terms
If you decide to make a counter-offer, be sure to include a deadline for the seller to respond. This will help keep the negotiation process moving forward.
And if you decide to walk away from the deal, be sure to let the seller know in writing. This will help avoid any misunderstandings and make it clear that you’re no longer interested in purchasing the home.
Tips for Finding Negotiating Leverage with a Seller
Negotiation leverage is when one party in a negotiation has more power than the other. And when it comes to developing a counter-offer strategy for buyers, there are a few things you can do to give yourself some leverage.
Here are a few tips:
1) Get pre-approved for a loan – When you have a loan pre-approval in hand, it shows the seller that you’re a serious buyer with the means to purchase the home.
2) Have a backup offer ready – If the seller knows you have another offer on the table, they may be more likely to accept yours.
3) Waive contingencies – If you’re willing to waive certain contingencies, you may be able to get the seller to agree to your terms
4) Don’t be afraid to walk away – As the old song says “You got to know when to hold ’em, know when to fold ’em.”
5) Know your bottom line – and stick to it
6) Be prepared to compromise – If you’re inflexible, the negotiation process will come to a standstill. That helps neither party.
7) Be reasonable – No one likes dealing with a stubborn negotiator.
8) Use a real estate agent – They can help you with the negotiation process.
9) Do your homework – Know what the property is worth and what other similar properties have sold for.
10) Keep emotions out of it – Anger, frustration, an emotional attachment to the property, etc. can all cloud your judgment and make it difficult to negotiate in a calm and rational manner.
11) Know the difference between a buyer’s and seller’s market – Know your position in the overall market. A seller’s market gives sellers more power, while a buyer’s market gives buyers more power.
12) Put yourself in the seller’s shoes – Selling a home can be a difficult task that requires a lot of planning. Sometimes hiccups happen in even the best-laid plans. And, sometimes, sellers are just waiting for the best offer. Either way, know their motivations.
Of course, these are just a few of the things you can do to give yourself some negotiating power. But by following these tips, you’ll be in a much better position to get the home you want at a price you’re happy with.
What Else Should You Keep in Mind?
As you move through the negotiation process, there are a few things you should keep in mind:
1) Be prepared to negotiate
2) Don’t get too attached to any one property
3) Have realistic expectations
4) Keep your cool
5) Get everything in writing
What Happens When the Seller Accepts My Offer?
If the seller accepts your offer, congratulations! You’re one step closer to owning your new home.
Once the offer is accepted, you’ll need to start working with a loan officer to get approved for a mortgage. You’ll also need to have a home inspection anddone. These are important steps in the process because they will help you make sure that the home is in good condition and that you’re not overpaying for it.
Can I Change My Offer After the Home Inspection?
Yes. In fact, it is common for the negotiation process to start all over again after the home inspection. The inspection will usually reveal any problems with the home, and you can use these problems to renegotiate the price or terms of the contract.
For example, let’s say that the home inspection reveals that there is significant damage to the roof. You can use this information to renegotiate the purchase price or ask the seller to repair the roof before you close on the house.
The Bottom Line
Buying a home is a big decision, and it’s important to be prepared for every step of the counter-offer negotiation process, how you should handle a home seller’s counter-offer, and what you should keep in mind as you move forward.
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