Did You Really Expect a Counter Offer?

Reblogger Sheila Newton Team Anderson & Greenville SC
Real Estate Agent with Berkshire Hathaway HomeServices - C. Dan Joyner 21498

Now days, all offers and closings are difficult... It is hard enough dealing with professional agents and qualified buyers without having to deal with unqualified buyers and agents that should find a new profession! There are some great examples in this blog on what to do and not to do when presenting an offer... BUYER"S AGENTS.... pay attention PLEASE!

Original content by Randy Prothero RB-19250

Purchase ContractWhile teaching a class on purchase contract negotiations, I used an example of a home seller who rejected an offer.  The buyer's agent was upset that they didn't counter.

It was an appropriately priced home, that showed well.  The buyer sent in an offer for $100,000 less than the asking price.  There was no cover letter, no pre-approval letter and the contract looked like it was written by a 3rd grader.  No indication they were serious or would be able to close.  So the seller rejected the offer.

The buyer's agent responded immediately and demanded and explanation as to why they didn't counter.

Here is where the buyer and their agent went wrong:

  1. The price was so far from anything the seller would accept, they had no common ground.  They were not going to meet them in the middle or anything close to it.
  2. The contract was not executable.  In the rare case that the seller considered accepting the price, they could not sign the contract.  They would be forced to counter to clean up the mistakes.  The counter would require a re-write of the entire contract to clean up mistakes.  If they have to counter to clean up the contract, the price is on the table too.  This mistake weakens the buyers hand in a negotiation.
  3. The buyer did not persuade the seller they were serious.
  4. The buyer's agent showed a lack of professionalism and convinced the other side this would be a painful at best escrow, if it ever got there.
  5. The buyer did not make the case that they could close if they got to escrow.
  6. Bottom line - The buyer did not give the seller any real basis for a negotiation.

When you make an offer on a home you need to do a few things.

  1. Present a clean, executable contract.  If they sign it, you are going to escrow.  Be sure they are not forced to counter, to clean up your contract.  If they do, everything is on the table.
  2. Demonstrate that if they accept your offer, they will be dealing with a professional and not an idiot.
  3. If you offer less than the seller wants to accept, make your offer strong and attractive in every other way.  Make them think twice before taking the risk of losing your buyer by countering.
  4. Here's the bottom line.  You need to make the case that if they take their home off the market, you will bring it to closing.

When presenting an offer, make the other side feel comfortable dealing with you.  If they feel confident you can close, they may be a little more negotiable.  Solid buyers do not grow on trees.  Flaky buyers and flaky agents do not get the same level of respect.

I just added a follow-up blog post to this one: Not All Realtors® Agree - Rejection vs. Counter Offer

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Rainmaker
1,349,703
Jeffrey DiMuria 321.223.6253 Waves Realty
Waves Realty - Melbourne, FL
Florida Space Coast Homes

Interesting...how many contract offer do you get that you need to tell your clients...well I need to get the selling agent to clean up about 10 items but here is the offer. I can not understand why agents do not understand that they need to write a bulletproof contract offer.

Nov 16, 2010 01:56 AM #1
Rainmaker
260,448
Connie Goodrich
Keller Williams Realty - McKinney, TX
CRS ABR (McKinney Realtor)Texas

I had read this post when originally circulated .. I always encourage a counter offer, no matter how outrageous the offer is .. you just never know how things may end up.  Besides, it is just an opportunity that might just happen.  Our jobs is to get our clients out of emotion and into a business mode.  A hard task at times. 

Nov 16, 2010 02:00 AM #2
Rainmaker
820,616
Sheila Newton Team Anderson & Greenville SC
Berkshire Hathaway HomeServices - C. Dan Joyner - Anderson, SC
Selling the Upstate since 1989

for more info on out area, check out our website at www.sheilanewtonteam.com

Mar 29, 2011 02:07 PM #3
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Rainmaker
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Sheila Newton Team Anderson & Greenville SC

Selling the Upstate since 1989
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