Counteroffer Mistakes In Real Estate
Many home buyers, especially first time buyers make counteroffer mistakes. Some believe a seller will always counter and others sit on a counter offer from the seller putting themselves in jeopardy of losing the house.
A counteroffer from a seller isn’t guaranteed. Depending on how long the home has been on the market, how many showings there have been, and the seller’s motivation to move they may or may not counter the offer a buyer submits.
Counteroffer Mistakes On New Listings
Homes that are new listings will rarely sell at less than list price. A home that sells within the first week of being on the market was priced at or below fair market value. The market speaks when homes are priced correctly! It’s a risky plan to try to negotiate thinking the seller is going to counter when the home is newly listed.
Counter offers are not guaranteed and even if the seller counters there’s another mistake buyers frequently overlook.
The Time It Takes To Process A Counter Offer
Time opens the opportunity for another buyer to tour the home and write an offer. It could very likely be a full price offer and even stronger financing or better terms.
→The listing agent and seller connect to talk about and analyze the offer
→Seller agrees to counter – the counter can be on price and terms
→The listing agent makes the changes and sends to the seller to sign, the seller may not check email until the next morning to sign
→The listing agent receives the signed counter, sends it to the buyer’s agent
→Buyer’s agent contacts the buyer to share the counter and discuss the changes. Buyer has to decide whether or not to accept the counter or counter back
→Buyer decides to accept
→Buyer’s agent sends the contract to the buyer to sign
But, wait – there’s a counteroffer mistake about to happen.
Before the buyer signs to accept the sellers counter the listing agent calls the buyer’s agent to share another offer has been received, it’s stronger, and the seller is withdrawing the counter.
Poof! There goes the house because too much time passed.
Every item above can take hours. The listing agent, seller, buyer agent, and buyer all have work and life happening while handling a counter. They don’t get finalized in the blink of an eye! Because of that emails may sit for an hour or two, phone tag can be played, and then there’s time to consider the counter terms. A day can easily pass before acceptance or counter are delivered back to the seller.
Why Is This A Counteroffer Mistake?
Because the odds of you being the only buyer in the marketplace or even the only buyer interested in the home are low. Non-existent in some markets. What you find appealing in a home probably isn’t drastically different for any other home buyer.
So, it’s another counter offer mistake to open the opportunity for the seller to have another buyer submit their offer.
Just because the seller countered doesn’t mean you’ve secured the house.
24 hours or more is very common when it comes to counter offers. That’s more than enough time for another buyer to write an offer. A strategy the first buyer overlooked because they were hoping to negotiate.
Buyers who are looking to save by offering less on a home don’t see that it’s a counteroffer mistake. There was never any savings to be gained if the seller had no intention of accepting a lower offer.
Even if the seller countered and was willing to accept a few thousand less it still opens the opportunity for another buyer to come in and secure the home.
Don’t be the buyer that makes a counteroffer mistake. Sellers don’t always counter the offer and even if the seller does you can still lose the house if it’s still being shown.
**These scenarios don’t apply to every market – market conditions matter. They do however apply directly to my market at the time this post was written
Additional Resources:
Mortgage Pre-Approval vs. Mortgage Pre-Qualification
How To Buy A Home With No Money Down via Luke Skar of Madison Mortgage
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