5 Reasons You May Not Want to Counter That Offer

By
Real Estate Broker/Owner with Mint Properties, Lic. #01871795 Lic. #01871795
https://activerain.com/droplet/cDq

 

5 Reasons You May Not Want to Counter That Offer

It never hurts to ask, right?  How many times have you heard that expression?  However, as a real estate agent, I have a front row seat and back stage pass to home buying and selling action, and I can say with absolute authority that -- sometimes it does hurt to ask.  Countering a buyer’s price and terms is the equivalent of asking.  And there is risk in doing that.  When you are selling a home, here are a few reasons you might want to rethink countering a buyer’s offer:

1) It’s a fair offer.  The offer is fair and it hits your target.  What more could you want?  A little more you say?  You may want to resist the temptation to ask for a little more.  Just because a buyer offered you what you want up front doesn’t mean there is more meat on the bone.  The buyer and their agent studied the market before writing the offer and they probably reviewed the same comps you and your agent studied.  They know they've written a fair offer -- it didn't happen by accident. If you counter their fair offer, they may think you are going to be unreasonable throughout the transaction, give up, and simply walk away.  Think twice before countering a fair offer.

2) It was prepared carefully.  As an agent I know presentation matters.  You may not be able to determine whether an offer is well prepared, but your agent will know. In my opinion, a well prepared offer leaves out unimportant requests, and includes every single piece of information necessary to make a decision.  A good buyer’s agent is going to counsel their buyer about how to make a good offer, what to leave out, and what to include -- and a serious buyer will listen.  When I receive a well prepared offer, I not only know that the buyer is serious, I know that they are worth taking seriously.  Think twice before countering a serious buyer with a well prepared offer.

3) You will interfere with the buyer’s momentum.  Yes, there is a momentum to the home buying process.  You may have forgotten that if it has been awhile since you bought a home.  Countering can put a kink in momentum -- and it can kill the enthusiasm of a buyer.  Especially in today’s market where they must withstand a whirlwind of negative news reports, the opinion of their family, friends, (and sometimes their agent), as well as hurdle through the current invasive loan pre-approval process in order to write an offer. Countering can sometimes feel like a road block to a buyer who has already navigated an obstacle course.  Think twice before slowing a buyer’s momentum with a counter offer.

4) The market is declining.  This has to do with leverage.  If the market is declining in your area, the buyer is aware of that fact as well.  So, they may be absolutely insulted that anyone would counter any offer they make in that type of environment.  You simply may have no leverage in your current market. This is true even on a short sale -- if the market is declining and the offer is reasonable -- it is sometimes better to let the bank do the countering, if they choose to do so.  Think twice before countering in a declining market, lest you find the value of your home declining with it.  

5) A counter is a rejection and some people don’t take rejection well.  This reason is almost completely emotional and psychological.  Simply put, not every buyer is up for a nice spirited game of negotiations.  You might return that serve to find that the other player has walked off the court. Some people just can’t handle rejection.  Other people like to be in control.  And, some people just don’t like to play what they view as “a game.”  I’ve found that there are people who will never ever respond to a counter offer.  They typically “don’t do bidding wars” and they “don’t do counter offers” either. Think twice before rejecting that offer with a counter.

Every situation is unique, and the decision of whether to counter an offer should reflect both the current market for your home and the particular offer that is presented.  However, I do believe that the decision to counter an offer should not be made lightly. At a minimum, you should think twice.

Tni LeBlanc is an independent Real Estate Broker, Attorney, and Short Sale Agent. She is a Certified Distressed Property Expert (CDPE) and Certified HAFA Specialist (CHS) serving the Santa Maria, Orcutt and Five Cities area of the Central Coast of California.

If you are considering a short sale of your Santa Maria, Orcutt,  or Nipomo home, you should seek out an experienced Central Coast Short Sale Agent to guide you through the process.  If you would like a short sale consultation, please call my office to schedule a meeting or a telephone consultation at (805) 938-9950.

* Nothing in this article is intended to solicit listings currently under contract with another broker.  This article offers no legal or tax advice.  Those considering a short sale are advised to consult with their own attorney for legal advice, and their tax professional for tax advice prior to entering into a short sale listing agreement.  Mint Properties is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit rating.

Copyright© 2011 Tni LeBlanc *5 Reasons You May Not Want to Counter That Offer*

 

Posted by

Tni LeBlanc, Broker
(805) 878-9879 mobile/text

tni@mintprop.com
www.MintProp.com
CalBRE #01871795

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Re-Blogged 24 times:

Re-Blogged By Re-Blogged At
  1. Carla Freund 06/18/2011 09:59 AM
  2. Hosai Nasir 06/18/2011 04:44 PM
  3. Susan Haughton 06/19/2011 09:44 AM
  4. Barbara Tattersall 06/19/2011 01:14 PM
  5. Susan McCall, Listing and Buyer Agent 06/19/2011 02:26 PM
  6. Chuck Carstensen 06/19/2011 02:47 PM
  7. Pamelyn Meller 06/19/2011 03:01 PM
  8. Debbie Durkee 06/19/2011 03:29 PM
  9. Lainie Ramsey 06/19/2011 03:34 PM
  10. Steve Davis 06/19/2011 04:12 PM
  11. Leslie DeLuca 06/19/2011 04:19 PM
  12. Michelle Carr-Crowe Just Call 408-252-8900 Top 1%! 06/19/2011 04:24 PM
  13. Allison Stewart 06/19/2011 11:30 PM
  14. Barbara Martino-Sliva, Top Producer 06/19/2011 11:37 PM
  15. Wendy Cutrufelli 06/20/2011 03:56 AM
  16. Gene Riemenschneider 06/20/2011 05:35 AM
  17. Julie Baldino 06/20/2011 06:50 AM
  18. Erick Blackwelder 06/20/2011 08:10 AM
  19. Dave Gubler 06/20/2011 01:55 PM
  20. Kristen Wahl 06/21/2011 03:48 AM
  21. Joni Bailey 06/24/2011 03:20 AM
  22. Gabe Sanders 07/05/2011 05:43 AM
  23. Krista Lombardi 07/18/2011 06:54 AM
  24. Kamal Salim 01/27/2012 12:34 PM
Topic:
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Location:
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Groups:
Realtors®
Short Sale REALTORS®
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Ambassador
1,229,581
Melissa Zavala
Broadpoint Properties - Escondido, CA
Broker, Escondido Real Estate, San Diego County

Wow. YOu sure got a lot of comments on this one. I think that the idea of interfering with the momentum is very insteresting.

Jun 23, 2011 02:14 AM #180
Rainmaker
750,128
Kasey & John Boles
Jon Gosche Real Estate, LLC - BoiseMeridianRealEstate.com - Boise, ID
Boise & Meridian, ID Ada/Canyon/Gem/Boise Counties

Wow.  Lots of comments!  I'm a little behind on my blog reading and I haven't read all 180 comments, but I do think this post is spot on.  Great advice to sellers.  Ultimately it is their decision, but they need to be told the risks and you are absolutely correct, sometimes it does hurt to ask!

Jun 23, 2011 05:56 PM #181
Rainmaker
908,388
Pamela Seley
West Coast Realty Division - Murrieta, CA
Residential Real Estate Agent serving SW RivCo CA

Tni, I like your point about countering a buyer may be seen as rejection. Never thought of it that way before, but makes a lot of sense.

Jun 23, 2011 08:38 PM #182
Ambassador
1,240,901
Joni Bailey
101 Main St. Realty - Huntsville, TX
Your Huntsville / Lake Livingston Area REALTOR®

I can not imagine how this one got by the feature folks at ActiveRain. I had to re-blog it! Thanks, Tni!

Jun 24, 2011 03:21 AM #183
Rainmaker
413,727
Tni LeBlanc, Realtor®, J.D.
Mint Properties, Lic. #01871795 - Santa Maria, CA
Tenacious Tni (805) 878-9879

Thanks Peggy - I don't do a lot of commercial so thanks for the insight.  

Kathy - Yes, they are very reasonable.  You'll love them.

Kitty Taylor - I hope they like "I told you so" emails.  Now that you have the post send over a copy with the next offer.  LOL.

Thanks Lanre!  They featured it in the newsletter but not on the website.  No gold star but tons of comments.  I'm amazed.  Thanks for the suggest!

Tony Lewis - I couldn't agree more.

Colleen - Hey that's what we are there for I guess -- to remind them of what they already know. LOL.

Gay - Yes, it is hard to make people come together in this market toward a deal.  There is so much pain and fear.

Katerina - Thank you!  Working short sales I see silly counter offers by the bank all the time!

Donna - No they can't.  And even though many agents negotiate all the time -- often our clients do not.  It's a very different experience for them.  Some are too eager and some too stubborn.  If you want certainty, take a fair offer when it is presented.

Thanks Melissa - Yes, there were a lot of comments!

John & Kasey - Yes, sometimes it does.  Only ask if it's truly important.  Especially in this environment.

Thanks Pam - Yes, some buyers take it as a personal rejection too.  No matter how much you prepare them.

Joni - Thanks for the re-blog Joni.  They featured it in the newsletter but not on the site.  I appreciate the vote of confidence.

Jun 24, 2011 04:36 AM #184
Ambassador
508,442
Pam Dent
Gayle Harvey Real Estate, Inc. - Charlottesville, VA
REALTOR® - Charlottesville Virginia Homes / Horse

Well stated.  I always tell my sellers to consider carefully becuase when they counter the first offer goes away.  I think they are often under the impression that they can just go back to the origional offer if their counter doesn't work.

Jun 24, 2011 04:45 PM #185
Rainmaker
413,727
Tni LeBlanc, Realtor®, J.D.
Mint Properties, Lic. #01871795 - Santa Maria, CA
Tenacious Tni (805) 878-9879

Pam Dent - You are giving them good advice.  Many times people who don't negotiate for a living don't understand that -- so it is important to remind or inform clients of that important fact.

Jun 25, 2011 08:27 AM #186
Rainer
19,033
Erika C. Harris
First United Realty - Douglasville, GA

Excellent post! This a definte "MUST READ" for sellers.

Jul 01, 2011 09:59 AM #187
Rainmaker
887,255
Gail Robinson
William Raveis Real Estate - Southport, CT
CRS, GRI, e-PRO Fairfield County, CT

Tni - The biggest danger is that countering an offer takes time and another property may catch the buyer's attention.  If it is a fair offer, then accept it!

Jul 17, 2011 04:45 AM #188
Rainmaker
147,409
Krista Lombardi
Prudential Calfornia Realty - San Diego, CA

Very informative post. Thank you.

Jul 18, 2011 06:51 AM #189
Rainer
132,868
Roseanne Campagna
John L. Scott RE Maple Valley, WA - Maple Valley, WA
Kent/DesMoines/Blk Diamond/Renton/Maple Valley, WA

I caught the reposting on this, but want to thank you for the thought provoking insight. The buyer's momentum was priceless.

Jul 18, 2011 07:02 AM #190
Anonymous
TJ Nelson

I love the "stop & think" of your post. Too many sellers and I suspect agents alike, have "casino mentality" when negotiating. The seem to want to gamble on more, more, more. How many times have we seen our seller say no to the first offer because it was too soon or a tad low; only to suffer the hindsight down the road that "that" was our best offer, now long gone. Great post!

Oct 17, 2011 09:38 AM #191
Rainmaker
893,356
Thomas J. Nelson, Realtor, ePRO, CRS, RCS-D
Big Block Realty 858.232.8722 - La Jolla, CA
& Host of Postcards From Success Podcast

I love the "stop & think" of your post. Too many sellers and I suspect agents alike, have "casino mentality" when negotiating. The seem to want to gamble on more, more, more. How many times have we seen our seller say no to the first offer because it was too soon or a tad low; only to suffer the hindsight down the road that "that" was our best offer, now long gone. Great post!

Oct 17, 2011 09:44 AM #192
Rainer
135,626
Matt Robinson
Professional Investors Guild - Pensacola, FL
www.professionalinvestorsguild.com

This is certainly something that needs to be addressed on a case by case basis, but in our market, it's rare to come across a buyer who doesn't FULLY EXPECT some type of a counter to their initial offer.  In fact, when a seller DOESN'T counter, it oftentimes raises red flags that perhaps they are desperate and hiding something.  I ALWAYS encourage my sellers to counter, unless of course it's a full price & terms offer, and wholeheartedly disagree with most of your post.

However, we are in different markets, so I guess you never know.  Perhaps buyers and sellers in your market are completely different than ours.  Bottom line, it's whatever works for you...but it sounds to me like you're helping your sellers leave a lot of money on the table with this advice.

Dec 21, 2011 06:35 AM #193
Rainer
5,272
Michael K. Freeman
Real Estate eBroker Inc. - Los Angeles, CA

Hey Matt Best Regards to You & Yours for the Holidays, As to your post I'm in the So.Cali market mostly I do Commercial as of late more Multi Family more than anything else, if I have my buyers agree to the offering price and the offer is accepted I may expect a counrter offer maybe for house keeping type items as what Title Company & Escrow, but prior to my writing the offer I like to meet with my buyers and we discuss everything from the standpoint of trying to be fair so that this is a win win sitution that we all can live with, and if I should do a residential deal I try to use the same philosophy because the less paper flying back and forth the better chance of getting a smooth closing and ultimately that's what we all want, so the time spent discussing this prior to just writirng the offer I can earn my commission by pointing out any problems I might wish to point out, and in the commercial transactions with the letter of intent we can get the oppurtunity to see all the tenants agreements, have the report from our inspection plus we can have a oppurtunity to see the books so the NOI is clear, IRR is stated and checked, all agreements are seen and noted, so all the mysteries are cleared. I wish I could do this in the residential because all hidden secrets are not revealed and the countering maybe needed to be done just to get a win win situation, Countering just to look like you know what is going on is a waste if it's not the offer the seller would like don't accept it move on.

Dec 21, 2011 08:04 AM #194
Rainmaker
1,053,905
Sharon Parisi
United Real Estate Dallas - Dallas, TX
Dallas Homes

Tni, this is a great list and I love the format of the post, with the graphics next to each entry on the list.

Jan 26, 2012 02:00 AM #195
Rainer
40,314
Jimmy Phan
KELLER WILLIAMS REALTY IN MOORESVILLES, NC - Hickory, NC
Phan real estate group in hickory

great post Tni

very helpful on that contract nego

thanks Tni

Jan 26, 2012 12:11 PM #196
Rainmaker
822,832
Bob Miller
Keller Williams Cornerstone Realty - Ocala, FL
The Ocala Dream Team

Hi Tni,  Great post and congratulations on the top ten list!

Jan 29, 2012 11:34 AM #197
Rainmaker
630,197
Bill Reddington
Re/max Southern Realty - Destin, FL
Destin Florida Real Estate

Just had an offer on a house that I own. All your points applied to the offer except one. They offered at 35% less than asking price. After 23  years and well over a 1000 transaction I think I know how to price a property even my own. I believe that when you get one of those offers the buyer is just wasting everybodies time. I feel that sellers feel the same way. I did think twice. Our market is changing here. Multiple offers on properties twice last month. Starting to tell buyers don't miss it this time.

Feb 02, 2012 09:24 AM #198
Rainmaker
273,464
Wayne B. Pruner
Oregon First - Tigard, OR
Tigard Oregon Homes for Sale, Realtor, GRI

This is sage advice. Many Sellers finesse themselves right out of a sale and inevitably take less down the road.

Jun 06, 2012 10:07 AM #199
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Tni LeBlanc, Realtor®, J.D.

Tenacious Tni (805) 878-9879
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