How to write a counter offer real estate

How To Write A Counter Offer Real Estate

May 4, 2022

Produced by:
Carmel Woodman

With over 8 years of expertise, Carmel brings a wealth of knowledge as the former Content Manager at a prominent online real estate platform. As a seasoned ghostwriter, she has crafted multiple in-depth Property Guides, exploring topics such as real estate acquisition and financing. Her portfolio boasts 200+ articles covering diverse real estate subjects, ranging from blockchain to market trends and investment strategies.

A brief outline

Negotiating can be daunting when it comes to buying or selling real estate, however it’s all part of the process. If it’s your first time buying or selling a home, you’ll need to know how to write a counter offer real estate style, and how to react to a counter offer if you’re presented with one.

Table of Contents

If you’re a first-time real estate buyer or seller, you’ll probably know about counter offers, but you might not feel comfortable to negotiate a home price and make a counter offer just yet. Whether you’re a buyer or a seller, knowing how a counter offer works is an integral part of the real estate buying and selling process. So, we’ll take you through what exactly a counter offer refers to and give you our step-by-step guide on how to write a counter offer real estate style.

What is a counter offer in real estate?

House for sale

A counter offer in real estate is when one party proposes another offer in response to the other party’s original offer on a house. Put differently, this means that the party submitting the counter offer is rejecting the original offer that was made. The party that receives a counteroffer has a few options to respond with. They can accept it, give a counter proposal or they can reject it.

A counter offer isn’t binding in any way, and the sale only begins once both parties have agreed on a final offer. It’s important to note that counter offers can be made by both buyers and sellers. A counter offer can include the terms of the offer and there can be requests made for more information.

There is no limit to the number of counter offers that can be exchanged between buyers and sellers in real estate, so the negotiation can go on for weeks or months sometimes. When coming to an agreement, each party will need to make counter offers that are a compromise in some way, or the sale is unlikely to go through.

How to write a counter offer

Writing a buyer counteroffer or a seller counteroffer can be a delicate operation. Follow these steps to help ensure the negotiation process goes smoothly.

Step 1: Go over the original offer

While your agent may have gone over the offer and given you the run down, it’s important to study it yourself and make sure you know exactly what is being offered and why. Before you make a counter offer, you need to know exactly what you’re countering, to avoid making any mistakes. For example, if a potential buyer has made a lowball offer that’s lower than the sales price you’ve listed your home for, they may have specific reasons, such as the fact that repairs that need to be done or a market value drop in the neighborhood. Importantly, you are not required to accept a low ball offer. In some cases, it is simply a trigger for negotiation.

Step 2: Express any concerns

In your counter offer, you’ll make a note of any concerns you may have. For example, if you’re not interested in doing any repairs to the house you can address that in the counter and then suggest a price point that could work for both parties. Make sure that you modify any terms or prices to clearly indicate what your preference is.

Step 3: Make it personal

A counteroffer can appeal to the other party on a more personal level, particularly once you’re aware of their expectations, wants and needs. This way, you’re more likely to elicit an acceptance and close the deal quicker. For example, if a buyer needs to close the deal fast, but has given a lower offer, a seller could suggest that the sale is done immediately if the buyer agrees to a slightly higher price that works for both parties.

Step 4: Include the facts

Information about the present real estate market, the market value of the home , insights into the neighbourhood, and any other facts that help your case are a good idea to use in a counter offer. This shows that you’re serious about the sale and that you’re making an informed decision.

Step 5: Follow the format

A counter offer must be done in a specific format which includes an introduction, a body and a conclusion. Different types of counter offers have different formats so you should do your research beforehand and make sure that your counter offer fits in with the format that it should be. The counter offer should always end with a section for signatures so that if it is accepted, it can be signed immediately.


How to counter offer on a house as a seller

A seller would use a counter offer against a buyer’s original offer for a few reasons:

  • They would like to raise the sale price that was in the original offer
  • They want a higher earnest money deposit
  • They’d like to change the closing date if the original offer specified a date that was too soon or too far away
  • They want to make changes to the contingencies

Use The Listing Price As A Guideline

If a buyer has offered a price lower than the listing price, sellers will often counter with a higher price than originally offered, but one that’s still lower than the asking price. This strategy can work well to get the property sold.

Stick to the price

However, if a seller counters with the listed price, while that particular sale may not go through, if the house is fairly priced, the right buyer will pay that price for it.

Create a bidding war

If there are multiple offers on the property, a seller can create a bidding war amongst them and counter by using another offer that they have received as an example.

Add An Expiration Date

Put an expiration date on your counter offer to encourage the buyer to make a decision quickly and prevent the negotiation from continuing on for too long. This way, you can either close the deal or move on, without wasting time in a negotiation limbo. While the house is in negotiation, other buyers aren’t likely to put in an offer, so this time is valuable to the seller.

How to counter offer on a house as a buyer

Reasons to counter

A buyer would use a counter offer for various reasons, such as requesting that the seller covers the closing costs, in a price negotiation where the original offer was rejected, to change contingency time frames, alter the closing date and so on. The likelihood of a buyer receiving a counter offer is based on whether it’s a buyers’ market or a seller’s market, how long the home has been on the market, and whether the initial offer is near the listing price.

There are no limits to how many counter offers can be made so buyers can counter a sellers counter offer as well. Buyers who are wanting to negotiate a price will often submit a lower initial offer and when the seller comes back with a counter offer, they will counter again at a price they’re more willing to pay. Also, if a home inspection has been done and problems with the home have arisen, these can be addressed in the buyer’s counter offer.

Showing intent

Buyers who want to communicate to a seller that they’re serious should use the earnest money deposit, and suggest an increase in the amount that they’re willing to pay. It can help make the offer more attractive and ensure that the sale is concluded quicker.

Making a deal

Real estate counter offer example

Here’s an example of a counter offer for a home that is listed at $200,000.

  1. The buyer submits an initial offer of $190,000. The buyer also wants to close within 30 days and wants the seller to pay the closing costs.
  2. The seller counter offers with a price of $195,000. However, the seller would like to close in 40 days and is not willing to pay closing costs.
  3. The buyer accepts the counter offer to pay $195,000 for the house and agrees to close in 40 days.

Final thoughts

The negotiation process is the key to these transactions, so whether you’re buying or selling a house, be prepared to negotiate on many of the variables like property price, closing costs, contingencies and so on. Both buyers and sellers can benefit from a counter offer real estate deal, but some sort of compromise is more than likely the solution for everyone to get what they need. Negotiating can be a fine line to tread, so do your homework beforehand and make sure that you know your final price point, whether you’re selling or buying.

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