A counteroffer is an offer made by one party in response to another offer. This means that the new offer will be considered by the seller or buyer. In this case, the seller or buyer can accept or reject the counteroffer and continue negotiations as necessary.
Example
Let’s assume that a seller puts a house on the market for $500,000. If you want to buy this house, it is not a good idea to give the seller exactly what he/she is asking. You can start at $450,000 as your first offer. In this case, the seller may accept this offer or come back with a counteroffer of $490,000. If you think it is a fair price for the house, you can pay this new price. Otherwise, you can counter their offer with another one. This negotiation can continue until a final decision is made between the buyer and seller. The buyer’s agent and seller’s agent usually help buyers and sellers during these negotiations.
How many counteroffers allowed?
There is no limit number of counteroffers allowed. When the buyer puts in an offer, the seller may counter it with another one. It all depends on how much the seller wants to receive on the house. If they counter your offer, you can either accept it or counter it again.
There are some buyers who are not comfortable with negotiations. They accept the counteroffer from the seller right away. It is important to know that there is nothing wrong with counteroffers. You can always offer what you feel comfortable spending on the property. However, you must be reasonable as a ton of counteroffers could make you look like you are not a serious buyer.
What are the benefits of counteroffers?
Whether you are buying or selling, there are benefits to be reaped on bother side. The following are some of the benefits sellers and buyers get from counteroffer negotiations.
- Sellers get their properties off the market faster
- Buyers find houses faster
- Buyers save money on the property
- Sellers can get the most value on the property by refusing the first offer
- The property gets sold at the best price possible that benefits both the buyer and sellers
What are the consequences of counteroffers?
Should you want to negotiate on a property’s price? There is nothing wrong with it. However, the way you approach the negotiation will determine whether you get the house or not. The following list will cover some of the cons of counteroffers.
- Frustration on the seller’s side
- Frustration on the buyer’s side
- Buyers could lose houses to other buyers
- Buyers can stretch their budget more than they are supposed to
- Seller’s might end up selling their property for less than the property is worth
