Just when you thought that you offered your best price, a seller responds with a counteroffer. You’ll find that there are quite a few sellers that will put up a good fight and test your negotiation skills.
Don’t just focus on going through attractive house-and-land packages or admiring a neighbourhood up close. Ensure that you’re prepared to respond to a seller’s counteroffer. Below are a few suggestions you can apply.
Improve your offer
There are times when a seller makes a counteroffer because your initial price was too low.
In such a scenario, it’s reasonable to raise your offer to a certain amount. But before you do so, make sure to consult with your real estate agent.
Additionally, don’t pick an amount that is too painful for you to shoulder. If you raise your price too high, a seller may call your bluff and offer the property to a competing homebuyer. Stick to your planned budget as much as possible.
To beef up your counteroffer to the counteroffer, you can ask help from your agent to identify similarly priced homes that were recently sold.
Additionally, you can also increase your earnest money deposit to show the seller that you’re not kidding around.
Once a seller gets back to you with a counteroffer, don’t delay your response. If one to two days have gone by and you still haven’t answered, you risk weakening your negotiating position.
That is the last place you want to be as it gives sellers more reasons to consider other options — whether it’s walking rescinding their counteroffer or entertaining other buyers.
Your delayed response — and hesitation — could also empower the seller to employ more aggressive tactics. They could demand more concessions from you and put you in an even more difficult position.
Be willing to part with some contingencies
Another way to make your counteroffer more appealing is by letting go of some contingencies. That reassures sellers that you’re doing whatever it takes to get to the closing stage.
However, exercise extreme caution, and don’t give up the major contingencies. For instance, if you give up the contingency associated with home inspections, you may realise later on after moving in that a few major issues are present (e.g., roof leaks, clogged drains). You can no longer hold sellers accountable for repairs at that stage.
As always, seek the advice of your agent. He or she will help you consider factors like loan program requirements, risk tolerance, and the market where the home is.
Walking away is an option, too
However, at a certain point, you also have to consider walking away seriously. It can happen if you and your agent sense that you’re getting a bad deal.
Several red flags can indicate a bad deal, and a lot of it will depend on your negotiations and points of contact with a seller. Sometimes a deal may look good on paper, but your gut tells you otherwise.
When considering the seller’s response to your counteroffer and the other aspects, remember to check how you feel about it. If your gut and your agent confirm your doubts, then the smartest decision may be to walk away from the deal.