What Constitutes a Real Estate Counter Offer?
A real estate counter offer is generated by a home seller after a buyer has submitted an offer to purchase and the terms are not agreeable to the seller. Typically, a counter offer states that the seller has accepted the buyer’s offer subject to the following particulars. The following particulars can address such items as:
- Increasing the size of the earnest money deposit
- Refusals to pay for certain reports or fee
- Total consideration (generally a higher price)
- Changing service providers
- Altering closing or possession date
- Excluding or adding personal property from the contract
- Modifying contingency time frames
- Early release of deposits
- Including amendments or addendum’s
- 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 no limit to the number of counter offers that can be submitted back and forth. Here is a real example of five counters on a property listed at $415,000 in Florida. The buyer had submitted a lowball offer at $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 dryer to remain as personal property.
- Seller Counter Offer #3 from Seller to Buyer
Seller agrees to sales price of $407,500. Refrigerator, washer an dryer excluded from sale.
Finally, the buyer accepted the fifth counter.
How is a Counter Offer Accepted in Real Estate?
If the counter offer is issued by the seller, the buyer can simply accept the counter and deliver it back to the party designated to receive it. Time is always of the essence. Counter offers contain an expiration date, just like purchase offers, which means the seller can accept another offer while the buyer is deciding whether to sign the counter offer.
If that happens, typically the seller will withdraw the counter offer.
When I’ve called agents to find out availability of property and whether any offers have been received, it’s very common (especially in seller’s markets) to hear, “We have a counter out.” Some agents would feel discouraged at that news. But I’ve snatched homes out from under the noses of competing buyers by immediately submitting an offer from my buyer while the counter “was out.”