The Counter Offer: What Its All About
Almost everyone has to negotiate the price of a home at some point in their lives. Realtors help their clients do this for a living. The rest of us have to do it once in a while, whenever we need to buy a house. Unfortunately, many people don’t take the time to learn how to negotiate better deals, and easily end up spending a lot of money on a home that may not be right for them. At best, a poor negotiator can get a house that doesn’t meet their standards, or whose value is much lower than what they end up paying. Negotiating the purchase of a home boils down to one word: counteroffer.
The seller’s job involves preparing their home for sale, and making potential buyers see why it is worth the stated amount of money. As the buyer of the house, you have the option to write an offer on the home. If the seller does not fully like your offer, they may come back to you with a counteroffer. A counteroffer is basically a proposal made against an undesirable offer. Counteroffers are used by both the buyer and the seller, and everyone uses them to their advantage. Once everyone agrees to the terms set out on a counteroffer then the offer and any subsequent counteroffers become a legal and binding real estate contract. There can be multiple counteroffers involved in hammering out the terms and conditions for the sale of a home and its not always about the price. Things such as move in dates, the title insurance company to be used, who is paying for a home warranty etc. are quite often counter offered.
Another form of counter offering occurs during a home inspection, if the original contract allows for this to occur. Say during a professional home inspection you find that the roof needs some repairs and the sink has a leak. You can use notify the seller of these points in writing and request that the seller make the necessary repairs. The seller then has the option to either agree to do all the repairs the buyer requested or maybe they will do one and not the other in which case they would be counter offering back on the buyers original request . Some sellers may entirely reject doing any repairs and wait and see if the buyer will accept their response and buy the home anyway without the seller doing any repairs. As a seller they run the risk of the buyer cancelling the contract if it permits and having to place their home back on the market for sale.
Most people fail to understand that the purchase of a house is more of a process than a transaction. It is very different from, for example, the purchase of a vehicle. You need to know exactly what kind of house you are looking for, and what amount of money you are willing to pay. You need to also spend time inspecting the house, and negotiating the price before you make such a big financial decision. In addition, whenever you inspect a house, you need to know the threshold for the price, that is, the price level you are not willing to go above.
Have your real estate agent give you an idea of all the costs involved in the purchase of any prospective home you may like. The price a home is offered for sale at it not the only line item involved in a real estate transaction. Other fees such as loan origination fees, if you are getting a mortgage, home inspection fees, termite reports, septic inspections, title fees, recording fees, home warranty to name just a few are all expenses involved over and above the agreed upon purchase price of a home and will add up to thousands of dollars.
About the author
Sheryl Robinson is a licensed real estate agent based in Gilbert, Arizona and is the owner and an associate broker of Home Key Realty. Sheryl obtained her license back in 2003 and forged her way through the real estate crisis of 2008 by helping many families short sale their homes to avoid foreclosure. Today she is an active Realtor in her market helping educate buyers and sellers with their real estate needs.
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