(Reposted from my other blog at www.FabulousPalosVerdesHomes.com)
You finally find the house you’ve been looking for, agonize over what price to offer, settle on a strategy of price and terms that you feel will be attractive to your seller, and wait, hoping for the phone call that will tell you that your dream house is soon to be yours. Instead, you hear the words “There’s a counter offer coming in.” This can happen even in this Buyer's Market for the most attractive, most attractively priced properties! Now many buyers, in my experience, tend to panic at this point, while in reality this is just a part of the give and take of the normal negotiating process. You probably didn’t offer full price — you are trying to get the best deal you can. So are the sellers. The happiest real estate deals are where everyone thinks that they pushed the other side just about as far as they could and still made the deal happen.
So the key to counter offers is to read between the lines and determine “”What is the issue that drove the counter?” Is it simply price? Or are other things, like the seller needing a longer escrow, or the seller wanting more “earnest money” in escrow to feel comfortable, or perhaps the sellers’ needs to rent the place back for a week or two after closing also driving the deal?
Many times, what seems to be just a straight money issue are really emotional issues about these other things that get mixed in. One time, a seller actually countered back with an offer that differed essentially by only $500 — he just had to be able to tell his friends, I guess, that he had countered at a higher price! The buyer signed laughingly and we had a deal and the seller could happily tell everyone what a hard negotiator he was.
When you are the only buyer that a seller is countering to, you do not have to simply accept the counter offer or walk away. You can send back a “counter-counter-offer” and this can go back and forth a number of times until you can reach an agreement. It can even be fun if you try not to take any of it personally and try to put yourself in the other sides’ shoes and think about what do they need to feel whole and healthy at the end of the day. If you really try to be fair and objective, and while you want to get a good deal, you also want to be honest and fair, you can almost always find a way to compromise and give them what they want without sacrificing what you want.
However, when the dreaded “multiple counter-offers” box is checked on the form, all bets are off. At this point, you have to ask yourself, how badly do I want this house? Because sometimes even if you agree to all the terms on the counter offer, you won’t get the house, because someone else will also agree to all their terms and they might like their downpayment better or whatever.
If you really want it, you have to make the grand gesture and go OVER what they asked for in some way. Maybe not money, maybe it is some other thing, like not asking for the refrigerator after all, or offering to close escrow faster if you know that will make them happy. Usually, though, my mentor in real estate says “If there is one other offer, go at least full price of the counter, if there are two other offers, go $10,000 over the counter.”
On the other hand, sometimes the multiple counter offer box is checked because they happen to have one great offer (from you) and are lucky enough to have one horrible, crummy, lowball offer from an unqualified buyer. I say lucky because this legally allows the seller’s agent to check the little “multiple counter-offer” box. Do you know which situation it is? Nope. It’s like poker. They could be bluffing. You just have to decide how badly you want that particular house and whether you are willing to pay x amount for it in order to ensure that you “win” the “hand.” As your Realtor, I can advise you, and I can try to figure out if there really are other legitimate offers. But only you can figure out how you are going to feel if I tell you that you lost the house by a few thousand dollars. Maybe you’ll say “Fine, it wasn’t worth more than what I bid.” But if there’s a chance that you’ll feel sick at heart, then remember that the seller holds the Aces in the multiple counter offer situation. If you really, really, really want the house, then you sometimes have to be willing to raise the stakes.