While some real estate transactions are completed with the acceptance of an original offer, it’s more common to see negotiations, or counter-offers, between buyers and sellers before the deal is done. Even though the counter-offer phase of a real estate deal may seem overwhelming, you can make it through with the help of your Texas REALTOR® and some insight on what to expect.
The basics of counter-offers
At its most basic, a buyer usually submits an offer with specifics on the purchase price, down payment amount, financing, timing and other business details. After receiving the buyer’s offer, the seller could accept it. Or, the seller could send it back with changes to one or more terms. Counter-offers are simply responses to original offers, whether it’s a change to the purchase price or a refusal to leave an appliance.
Once a counter-offer has been made, the other party can accept the counter, make another counter offer or not respond at all. Additionally, the person who made the counter-offer can withdraw it by communicating that withdrawal to the other party before the counter-offer is accepted.
How do you know if making a counter-offer is right for you? It depends on what you want. For example, if you’re selling a home and you get an offer with an acceptable price but a closing date that doesn’t work for your schedule, you can counter with another date. Or, if the offer is lower than you’d like, you can make a counter-offer with an amount that would make you happy. Once everyone agrees, you’re on your way to closing day.
Of course, this is an oversimplification of only one part of a real estate transaction. There are still plenty of details to take care of between an accepted offer and closing.
What could possibly go wrong?
Making counter-offers seems easy enough, but what if there are problems? Many people don’t realize that any change to a contract that results in a counter-offer – even if it’s as minor as asking to keep the refrigerator – automatically voids previous offers, and the buyer or seller can completely ignore the new offer if he desires. For example, if you submit an offer to purchase a home and the seller comes back with a counter-offer, you can then counter his counter-offer. If he rejects it, the deal is off. You can’t go back to his first counter-offer and accept it.
So, before you make one last counter-offer to try to keep the refrigerator, make sure that appliance is worth potentially losing the deal, because a counter-offer gives the other party the power over whether the transaction moves forward or comes to an end.
A seller who is working with a Texas REALTOR® can take advantage of his exclusive access to the Seller’s Invitation to Buyer to Submit New Offer form. Instead of creating a counter-offer, this form allows sellers to respond to a buyer’s offer with an invitation for the buyer to submit a new offer. This form clearly states that the seller is not making a counter-offer and it typically spells out what terms will make a more favorable impression on the seller. This approach keeps the seller’s options open to receive offers from other potential buyers. The buyer can benefit from the form as well since she can see what the seller is likely to accept in the deal and can decide if she wants to pursue a different listing that better suits her needs.
Get it in writing
Finally, get everything in writing. Verbal offers and contracts aren’t binding, and you should not rely on emailed details. A contract must be in writing and signed to be enforceable.
Your Texas REALTOR® is obliged to convey a verbal offer or counter-offer or verbal acceptance to the other party, but a contract is not enforceable until it is in writing and signed by all parties. Once a deal is signed, it is much more difficult for either party to pull out without being penalized.
If you find yourself in the offer/counter-offer stage, make sure you are accessible so you don’t miss out on a house you want or on a potential sale. And finally, be sure to communicate with your Texas REALTOR® and revisit all considerations before making or accepting any counter-offers.
For your real estate needs, please contact Waymond Lightfoot (RE/MAX Genesis) at 210-386-5201.