Dealing with counter offers
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It is common for a seller to receive an Offer to Purchase at a price below the asking price, especially in a market where buyers perceive sellers to be desperate and willing to accept any offer.
Estate agents are obliged to present all written offers to their sellers and may not disclose the details of any of the offers to other buyers.
Not all Offers to Purchase are accepted the first time round and there is often a period of negotiation and counteroffers by sellers. Buyers can in turn also counter the seller's counteroffer.
A counteroffer must be presented in writing and a seller cannot make unilateral changes to an existing offer. Typically, a counteroffer states that the seller has accepted the buyer's offer subject to one or more changes, usually a higher price offered, bigger cash deposit or removal of certain contingencies.
Once the counteroffer is accepted by the other party, it becomes a legally binding document on the basis set out therein.
Seller counteroffers can break a deal
If an offer is forthcoming quite soon after the property is listed, a seller can feel that it was too easy and that they can get a higher price. It might simply be that the property was exactly what the buyer was looking for, hence the quick offer.
Sellers should therefore guard against thinking that they could have achieved a higher price and consider the offer carefully before rushing into a counteroffer. In a seller's market with an abundance of buyers, you could chance a higher price, but this might be counterproductive in the current market.
Consider whether you might alienate the buyer and lose the deal. There is no guarantee of a higher offer. If you appoint a good agent on a Sole Mandate at the outset, they should provide the best advice in terms of the asking price. The agent will also have a good sense as to whether the buyer could be "pushed" to a higher price or better terms.
Sellers should take care not to accept verbal counteroffers from other agents. It is only an offer when it is in writing and legally compliant.
Buyers should not wait too long before accepting or rejecting a counteroffer
Buyers should beware that the seller can accept another offer while the buyer is deciding whether to move forward and they should act quickly when a counteroffer is on the table.
Should the seller get a more favourable offer while the buyer is still deciding, the seller would typically withdraw the counteroffer, effectively removing the first buyer from the deal.
Home is our Story and property our passion. As a credible real estate brand with a track record of over five decades in the property industry backed, Seeff's agents are skilled and experienced negotiators and are best placed to assist sellers and buyers with their property needs. Contact us today!
Author: Seeff
