Real estate counter offer etiquette. Is that even a thing?
I guess it's a thing. I mean,
I don't want to say that there's a right way or a wrong way to go about making
your counter offer, but there are definitely better ways.
Whether you're a buyer or a seller,
let's talk about best practices for putting together a counter offer that
the other party is more likely to accept
If this is your first time here, welcome! If you've been here before,
thank you so much for coming back and for spending your time with me.
My name is Lindsay and I'm proud to be your Anthem,
Arizona REALTOR® with the Wise Move AZ Team at Realty ONE Group.
On this channel, we have a lot of fun talking about all things,
Anthem and real estate, every single Thursday,
and we absolutely love having you along for the ride.
Counter offers are pretty common. If you're a seller,
chances are you've received an offer from an interested buyer.
The offer is intriguing enough that you want to respond,
but there are a few points that you simply cannot live with.
Since you don't want to outright accept the offer,
nor do you want to outright reject the offer,
your best option is to issue a counter.
On the flip side, if you're a buyer you likely made an offer,
the seller responded with a counter and you aren't willing to accept their
counter. Rather than rejecting and walking away from the home,
you've decided that you want to respond with a counter offer of your own.
In Arizona,
we have access to the awesome forms put together by the Arizona Association of
REALTORS®. The counter offer form is pretty straightforward.
Your REALTOR® will use this form to outline the terms you wish to change from
the offer or from the subsequent counter offers. Using this form,
keeps everything on the 'up and up'.
While it's great if your agent can talk to the other agent and everyone can come
to some sort of verbal agreement before putting pen to paper,
it's important to note that nothing will be enforceable unless it's in writing
and accepted by both parties.
It's that simple and that complicated all at the same time.
So how do we put together a counter offer that won't have the other party
walking away? Tip #1: Take a Step Back.
If you're in a position where you're having to make a counter offer,
you may be feeling a whole host of emotions. If you're a buyer,
you might be fearful that you'll lose the house. If you're a seller,
you might feel hurt that the buyer doesn't seem to see the value of your home.
Know that fear hurt anger, frustration, excitement,
nervousness, and anything in between is totally normal.
I definitely think it's worth taking a step back breathing and
acknowledging those feelings. Now, toss them aside! That's right.
Let the emotion go. I know, I know, it's easier said than done,
but bear with me.
This video is all about best practices and business etiquette.
I want you to treat this like a business decision,
and that means not taking anything personally and leaving emotion out of it.
Now that you're in the right head space, we can move forward. Tip #2:
Review the Facts.
I want you to look at all of the offer and the subsequent counter offer
documents in detail. This is totally a tangent,
but I remember being in a meeting with my broker,
and she said that she had seen an offer that wasn't fully accepted
until the 10th counter offer. Can you imagine?
I think the most I've personally experienced is three,
and even that was exhausting for the buyer and the seller. Anyways,
I want you to go through the purchase contract,
any previous counter offers and any other supporting documents
or addenda. Which terms work for you and which don't?
Be specific. For example,
if the closing date doesn't work for you make note of it.
I'm not saying you're going to get everything you want,
but I want you to be thorough. Also, if there are any inaccuracies, make note.
For example, if your name is spelled incorrectly,
a counter offer can be the perfect time to get this corrected without having to
draw up a separate agendum after you go under contract.
Once you've had a chance to review everything on your own,
I want you to do the same with your agent.
They'll be able to answer any questions you may have. Lastly,
I want you to be cognizant of how long you have to respond to the other party.
Part of having good etiquette is responding in a timely manner. Tip #3:
Do your Research. I want you to learn as much about the other party as you can.
Your agent, whether that's us or someone else, will be able to help with this.
The more you know about the other party,
the more you may be able to sweeten the pot and find a middle ground that's
agreeable to both sides.
While money is a big factor in these negotiations, it isn't everything.
Oftentimes there are things that you can do to make your counter offer more
appealing without any major impact to your bottom line. For example,
if you know, the buyer loves your TV,
you may be able to include it at a higher purchase price. If you're buying,
you may be able to accommodate the seller's preferred closing date for a break
in the purchase price. Additionally,
I want you to talk to your agent about what's typical.
This can help you to understand if what you're asking for will be perceived as
reasonable or unreasonable. For example, in Anthem,
it's typical to see the buyer and seller splitting the capital improvement fee
equally.
If you're the seller and you're proposing that the buyer pay the full capital
improvement fee, this could be perceived as unreasonable.
Of course it needs to be taken in context of the offer as a whole,
but you get the point. Tip #4: Get Creative. Alright,
now that you've taken a breather, reviewed the facts, and done your research,
it's time to put pen to paper and get this counter offer written.
The best counter offer is short, sweet, and to the point.
Your agent should be succinct in their writing,
including only the necessary details. For example,
if you want to change the closing date to January 15th,
because that's the earliest the lender can accommodate simply say,
'close of escrow shall be January 15th'.
The counter offer is not the place to provide explanations.
Your agent can and should do that at the time that they present your offer to
the other agent. Change only what you need and leave the rest.
The fewer changes you propose in your counter offer, the cleaner it is,
and the more appealing it may be to the other party.
Nobody wants to feel like they're being nickeled and dimed, so stick to only,
what's most important to you.
Take a moment to put yourself in the other party's shoes.
How does your counter offer impact their bottom line?
Does it seem reasonable? Negotiations are a game of give and take.
If you need to ask for more money,
consider throwing in something that will make it more appealing to the other
party. Like I mentioned earlier,
if you're the seller and you're countering for a higher purchase price,
but you also know that you'll be donating your outdoor furniture,
consider offering it to the buyer as a sign of good faith. I mean,
if your outdoor furniture is really awful,
that obviously won't help because it will just look like you're trying to pawn
off your donations, but you get the point.
Maybe a better example is if you purchased stools that go perfectly
with your kitchen and you know, they won't fit in, in your new place.
Consider offering them as a concession to the buyer in exchange for a
higher purchase price, be thoughtful and creative in your response.
If you're thinking, 'yeah,
I'm not feeling all that thoughtful or creative', don't worry.
Your agent can help to walk you through this.
We navigate tricky negotiations all the time and we can definitely make
suggestions on how to formulate a strong counter specific to your circumstances.
Lastly, be intentional with your response deadline.
I'm a fan of tightening up response deadlines, within reason.
If all parties have been very responsive through the process so far,
a couple of hours may be plenty for a simple counter offer. Alternatively,
if the other party is traveling, you may need to give a bit longer.
My goal is always to give just enough time to get everything buttoned up.
You don't want to give the other party so much time that they're able to shop
your counter-offer around for something better. Be aggressive, but reasonable.
Tip #5: Manage your Expectations. In my opinion,
having good counter etiquette includes managing your expectations
throughout the process.
You need to know that your counter offer could be accepted, rejected,
or countered. If your counter offer is accepted, congratulations are in order,
you are officially under contract! If your counter offer is rejected,
it's back to the drawing board. If you're a buyer,
this usually means that you're looking for a different house.
If you're a seller,
this likely means that you'll be working with a different buyer.
You also need to know that the offer and counter offer process is not
about winning or losing. It's not a contest.
The other side is not the enemy and the goal is not to beat the other
party. The goal is to find an agreement that all parties can live with.
Usually this means that both sides have to give a little.
Maybe you didn't get the price you wanted, but the closing date is perfect.
Know what you're giving up and what you're asking the other party to give up.
Being rational, thoughtful, and professional can go a long way.
So, there you have it! Are you ready to tackle your counter offer?
I would love to hear your feedback or even the points you're planning to counter
on in the comments below.
If you found this video helpful let me know by hitting that like button,
subscribing to our channel, and sharing this video with your friends.
Once you're under contract,
the next big step is navigating the inspection period.
If you want to learn more about reasonable requests after a home inspection
click to watch this video up top,
or if you're interested in understanding more about the different MLS statuses,
we use click to watch this video on the bottom. Enjoy those,
and I'll see you next Thursday!