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Sellers: Should You Counter Every Offer?

By Michael Jacobs

Industry Observer CalDRE #01165532

June 20, 2012 12:37 PM

Sellers: Should You Counter Every Offer?

When you list your Pasadena or San Gabriel Valley home, townhome or condo for sale with me, we will have a discussion about expectations including how will offers be handled. We will discuss the various scenarios that may take place and the different options available.

This post relates to counter offers and should you as a seller counter every offer you receive?    Maybe yes, maybe no.

Generally, I believe, any written deserves an answer in the form of a counter offer. Hmm, verbal offers -- no, sorry, offers need to be in writing to be enforceable in California real estate.

California law states the all written offers are to be presented unless you have informed me(in writing) otherwise. Regarding, counter offers, when should you not counter an offer?   Again, this decision is entirely yours as the owner and seller of the property but here is one of those scenarios we are finding in our always changing real estate market:

you have received multiple offers(isn’t that great?) --- you may have received MANY offers!   In my experience when there are five or more offers you can see a trend -- the offers seem to group together -- one kinda low, three offers all around the same price/terms and one that appears a bit stronger than all.   I’ll prepare a spreadsheet so you can compare all offers --- remember it’s not just price but also the terms of the offers.   Some of those terms include: close of escrow date, contingencies, personal property requested, cash versus loan, amount of down payment, allocation of costs, earnest money deposit, release of funds --- there are many different factors which may be important to you.   I take this portion of our negotiations very seriously and while there are no guarantees in real estate(or in life, right?) this approach will help you decide on a counter offer strategy and who will get a counter or maybe even an outright acceptance.

If you would like more detailed information regarding our real estate market today in the Pasadena/San Gabriel Valley, I am happy to meet with you to discuss our real estate market in the Pasadena/San Gabriel Valley or the northeast foothill communities within the city of Los Angeles -- even if you are just curious.   I can be reached at 818.516.4393 cell or michaeljacobs@coldwellbanker.com.

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Dave Halpern

Dave Halpern Real Estate Agent, Inc., Louisville, KY (502) 664-7827 - Louisville, KY

Louisville Short Sale Expert

Sellers are not obligated to respond to every offer, but it is a good practice. Keeping the dialogue open often leads to a meeting of the minds.

Jun 20, 2012 10:16 AM

Kathy Stoltman

Ventura, CA

RETIRED

I concur with your post, it really all boils down to communication.

Jun 20, 2012 10:24 AM

Michael Jacobs

Pasadena, CA

Pasadena And Southern California 818.516.4393

Dave -- of course, it's all about letting sellers know about options. Buyers should understand as well so there are no surprises when they do not get a response.

Kathy -- communication is definitely key - thanks for stopping by and commenting.

Jun 20, 2012 10:56 AM

1~Judi Barrett

Integrity Real Estate Services 116 SE AVE N, Idabel, OK 74745 - Idabel, OK

BS Ed, Integrity Real Estate Services -IDABEL OK

If the offer suits, there is no reason to counter. I believe that some sellers feel obligated to counter just as some buyers feel obligated to offer less than asking price or terms.

Jun 20, 2012 12:36 PM

Michael Jacobs

Pasadena, CA

Pasadena And Southern California 818.516.4393

Judi -- very true -- some buyers submit offers that meet(maybe even exceed) most, if not all, of the seller's requirements and/or desires --- and a seller may want to consider accepting that offer --- I've had it happen while representing both buyers and sellers --- it is whatever the seller and a buyer agree and it is their decision.

Jun 20, 2012 01:00 PM

Dale Baker

Baker Energy Audits and Commercial Properties Inspections - Claremont, NH

New Hampshire Relocation Real Estate Information

Howdy and evening Michael

Michael my friend, Sellers sure will find this here blog post info about making a counter offer mighty helpful. That sure is an outstanding home photo shoot you add to this here outstanding blog post.

Have a good one

Dale in New Hampshire

Jun 20, 2012 02:16 PM

Michael Jacobs

Pasadena, CA

Pasadena And Southern California 818.516.4393

Hello Dale -- in our current market, multiple offers are becoming more common so knowing options is a good thing. Thank you, as always, for your comments and kind words.

Jun 20, 2012 02:35 PM

Patricia Feager, MBA, CRS, GRI,MRP

DFW FINE PROPERTIES - Flower Mound, TX

Selling Homes Changing Lives

Michael, if someone took the time to write up an offer, the least the seller could do is respond.

By the way, that's quite a nice condo! I haven't seen one like that before. I hope business is going great for you!

Jun 20, 2012 05:54 PM

Michael Jacobs

Pasadena, CA

Pasadena And Southern California 818.516.4393

Patricia -- generally, I agree. Ultimately, the decision is the sellers' and I believe it is our professional responsiblity to discuss the various options with them and the advantages/disadvantages.

By the way, the photograph is of a single family home - not a condo.

Hope your week and business is going well as well - thank you for stopping by and commenting.

Jun 20, 2012 11:21 PM

Michelle Gibson

Hansen Real Estate Group Inc. - Wellington, FL

REALTOR

Michael - I also prepare a spreadsheet with multiple offers and you are absolutely sellers need to look at the other terms, not just the price.

I recently had multiple offers on one of my listings and while one offer had the highest purchase price they were also asking for 6% in seller concessions, which reduced the net price to the sellers below a majority of the other offers.

Jun 21, 2012 12:52 AM

Michael Jacobs

Pasadena, CA

Pasadena And Southern California 818.516.4393

Hello Michelle -- although some sellers glaze over when seeing a spreadsheet, it helps me explain and keep track of multiple offers and the differences and the example you cite(buyer asking for 6% seller concessions) is a big reason. It's all about the net proceeds and not price alone.

Jun 21, 2012 01:28 AM

Will Nesbitt

Nesbitt Realty at Condo Alexandria - Alexandria, VA

Nesbitt Realty is a family-run brokerage.

Great information Michael! Appreciate the content.

Jun 21, 2012 02:01 AM

Jeffrey DiMuria 321.223.6253 Waves Realty

Waves Realty - Melbourne, FL

Florida Space Coast Homes

Hi Michael,

I agree!

In a multiple offer situation I like to sit with the sellers and go over the terms and price on each offer. I like to negotiate with the offer that has the best terms (instead of price). If only one of three offers has 20 percent down and a 30 day close...that would be the one that my clients might want to win the negotiation.

Jun 21, 2012 03:29 AM

Michael Jacobs

Pasadena, CA

Pasadena And Southern California 818.516.4393

Thanks, Will -- I hope you are remaining as cool as possible as the heat wave continues in your area.

Jeffrey -- good strategy -- sitting down face-to-face whenever possible works best in these situations so the sellers can see the differences in the offers. Knowing and pointing out the differences is so important and very helpful to the sellers as they review offers.

Jun 21, 2012 06:55 AM

Suzanne McLaughlin

Sabinske & Associates, Inc. (Albertville, St. Michael) - Saint Michael, MN

Sabinske & Associates, Realtor

For the best information on the real estate market today in the Pasadena/San Gabriel Valley, reach out to Michael Jacobs. He knows the market, and he will guide you to the best price and terms on your sale or purchase.

Jul 01, 2012 08:26 AM

Michael Jacobs

Pasadena, CA

Pasadena And Southern California 818.516.4393

Suzanne -- hope you have had a good weekend --- are you ready for the 4th?

Jul 01, 2012 09:40 AM

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