Real estate counterproposal: what it is, how it works, and when to do it

A real estate counterproposal is a form of negotiation that can occur during a real estate purchase or sale. The counteroffer comes in response to a previous offer to purchase a house. Typically, the seller responds to a potential buyer’s offer with a higher price and/or different terms. The buyer is free to accept, reject or make an additional counteroffer.

For example, a buyer might make an offer below the listing price, proposing to buy at 200,000 a property listed for sale at 220,000. The seller, instead of accepting or rejecting the offer completely, can make a counteroffer at a slightly higher price, such as 210,000.

It is a bit like bargaining, or a conditional yes. By making a counteroffer, the seller is essentially saying, “Okay, I may be willing to sell you my house, but I would like to receive more money than you are proposing.”

The buyer can accept the new terms, reject the counteroffer, or put another proposal on the table, such as suggesting that the seller meet in the middle, offering 205,000.

Whether as a buyer or seller, accepting or not accepting a counteroffer depends on your needs and desires. Before proceeding or refusing, do your calculations and figure out whether it is more strategic to continue negotiating or to accept.

Assessing your priorities and budget is the best way to determine whether the proposed new conditions are acceptable.

How real estate counterproposal works according to Ideas & Real Estate
How real estate counterproposal works according to Ideas & Real Estate

Pros and cons of the seller’s real estate counterproposal

The biggest advantage of making a counteroffer, of course, is potentially being able to sell your home for more money than the buyer would like to offer.

That said, there are downsides as well: one is that you may end up wasting time with negotiations that go nowhere. Some buyers simply will not respond to your counteroffer, dropping the bargain.

In addition, if you spend too much time in negotiations and lengthy counter offers with a potential buyer, you may also risk neglecting the interest of other buyers, thus missing several sales opportunities. It is usually a good practice to set a deadline, in terms of time, to negotiations, so that the process cannot drag on too long.

Pros and cons of real estate counterproposal for buyers

Homebuyers are generally the ones affected by counteroffers: in fact, they make proposals and, based on these, the seller may accept, reject, or propose something else.

The main advantage of receiving a counteroffer, for buyers, is the possibility of securing the house at a lower price and on better terms, which is always a good thing.

However, if you are really interested in buying a property, it is not a good idea to “block” the seller with an endless back and forth of proposals and counterproposals.

Sellers can quickly tire of this type of negotiation, and the more time you choose to let from first proposal to actual confirmation, the more time the current property owner will have to look around and accept other offers. In addition, an uncooperative and uncompromising attitude may give the salesperson the wrong impression and make him or her fear that you are a difficult customer to deal with and very prone to raise issues.

If you have reached your spending limit, indicate that your counteroffer is your “last and best” offer, with a time limit for acceptance. This kind of transparency will make your position very clear to the seller.

If you have found the ideal home for you and have yet to make an offer, read this article for information on what a real estate purchase proposal is and how it works.

How to handle counteroffers when selling your home

If a seller receives an offer that they feel is too low, or otherwise not up to their expectations, there are three ways to respond:

  • Reject. If you are not satisfied with the offer and are not interested in making a deal, you can reject an outright real estate counteroffer. At this point the buyer may (or may not) return by putting a better offer on the table.
  • Accept with a contingency. If you wish to accept the offer but have specific concerns, you can accept with certain conditions, or contingencies, in place. Make sure the language in a contingency situation is crystal clear so that there can be no misunderstanding.
  • Make a counteroffer. If you wish to accept that specific buyer’s offer, but would prefer to get better terms, you can make a counteroffer. This may include a higher price or other terms, such as a specific date for closing the purchase or more elastic timeframes for making the move.

Tips for buyers making a real estate counterproposal

When making a real estate counterproposal as a buyer, it is good to know your limits. Although you may want to be flexible, you should still maintain a firm stance on the maximum amount you are willing to pay to purchase the property. This will help you stay out of bidding wars with other buyers, and avoid unclear or unpleasant situations with the seller.

Before responding to a seller’s counteroffer, therefore, double-check the compositions of the house to ensure that the seller’s assessment is reasonable. If, however, you believe that the seller’s asking price in the counteroffer significantly exceeds the fair market value that should be attributed to the house, you have more negotiating power to offer a lower price. But do it without wasting too much time: counter offers often have a strict deadline.

How a real estate agent can help you in counterproposal

What is the role of a real estate agent in counterproposal?

The role of the real estate agent, whether they represent the seller or the buyer, is to seek the best interests of their clients and help them move through the buying and selling process in the best way possible. Agents often advise on the decision to accept, reevaluate, or reject certain offers and counteroffers.

If a seller has received multiple bids, for example, the seller’s agent may recommend extending the deadline by several days or more to see if this high interest leads to a “battle of the bids” or if the customer prefers to accept one of the many proposals directly.

An agent can also play a key role in calming and soothing any negative feelings that may arise from the bargaining process.

A buyer’s agent, on the other hand, will be able to provide useful advice regarding the real estate counteroffer made by the seller and provide valuable insight into whether the counteroffer is valid or whether it is still negotiable.

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