Offers and Counter-offers— Doing the Dance

In a seller’s market, often a buyer only gets one chance—if there are competing bids, you do your highest and best, right from the start, one and done.   But if the area is not in hot demand, or the property has been on the market for awhile, a buyer has more room for negotiation.  The question is— how long can it take to reach a “meeting of the minds?”   Is there a limit on the number of real estate counteroffers home buyers and sellers can make?   You start lower than you can really pay, the seller comes back with a number that is more than you can pay.  You offer X, the seller counteroffers with Y, you volley back and hope it’s over; yet on and on it goes, like a never-ending tennis match. Exactly how long can this last? Is there a limit to real estate counteroffers?

Well, no.  While there might be a limit to the patience of either party, and many buyers and sellers can become annoyed at the seemingly endless back-and-forth— what can you expect?  In reality, the maximum most folks can tolerate goes like this:

  1. Buyer makes offer
  2. Seller comes back with counter-offer
  3. Buyer comes up to a number less than counter-offer
  4. Seller proposes to “meet in the middle”
Beyond that, petty annoyances can begin to set in.  That’s when the respective agents should be on the phone to each other.  Obviously, their fiduciary interests are somewhat at odds, but they are each trying to get as close to what their client wants, as possible.  And most often, certain compromises are necessary.  If there is no sale, then no one gets what they want.  It could be tweaking the terms of contingencies, closing dates, or just pointing out how “close” both parties are to agreement— and do they really want to throw away the deal for what might really be a fairly insignificant amount of money?
There’s no legal limit to how many counteroffers buyers and sellers can make,” says Michele Lerner, author of “Homebuying: Tough Times, First Time, Any Time.” “Counteroffers can be made as part of the negotiating process until there’s a signed agreement between the buyer and seller, or the seller decides to take their home off the market.”

Real estate counteroffers, explained: Why won’t they stop?

In some cases, a stream of counteroffers might be a stalling tactic on the part of sellers who are really hoping a better offer rolls in. That makes sense for them, but it’s plenty frustrating if you’re trying to buy the property.

“One way to get past your frustration and perhaps move negotiations forward is to mentally put yourself in the seller’s position,” Lerner says. “If you owned this home, you might want to hold out for the highest possible offer, too.”

If you do include such a clause, (which I went into in an earlier blog)  you should make sure to get in writing that the escalation applies only to a verified offer. “Verification includes a copy of the highest offer to the buyer’s agent and a copy of the proof of funds or pre-approval so these can be verified.”

 

Sometimes, however, the deal is just not meant to be.  In real estate, sometimes we just have to be philosophical and move on.  I always tell my clients “If we didn’t get this one, it means there is something better waiting for us in the future.”  In the Northampton area real estate market, this can be a tough pill to swallow, because it may mean a long wait.  But it is almost always true.  It was certainly true when I purchased my first home— I’m so glad I didn’t get the first one I tried for, because the second one turned out to be my dream home!

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