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Evaluating and responding to different offers

By Trulia | Published: Oct 14, 2009 | 24 Comments

Congratulations - you have received an offer on your home! So how can you evaluate and respond to the offer in a way that protects your interests but doesn't send buyers running for the hills?

The first thing to remember is that all offers are good. Why? Because it shows that a buyer has chosen your home over the massive amount of competition available in the marketplace. Any offer then, regardless of how high, low, or crazy it might be, should be taken as a compliment. Now the harder question - Should you accept the offer?

As a seller, when you receive an offer you always have three choices. First, you can accept the offer - this means subject to the conditions of the sale your home is officially sold. Second, you can reject the offer, and in effect tell the buyer to kindly kiss off. Or third, you can counter the offer. While many sellers instinctively reach for a pen to counter all offers, wise sellers take a deep breath before making this decision.

Many sellers view making a counter offer as a natural part of the sales process, but what many don't realize is that they are really rejecting the buyer's offer first and then presenting a new offer back to the buyer. The trouble with this is, the instant you give the buyer a moment to pause and reconsider their decision, even for a minor point, you run the risk of losing the buyer. Because of this the question that successful sellers have learned to ask themselves first is: Is it really worth a counter offer? This simple question should be the measuring stick with which to evaluate every item you plan to ask for from a buyer. In many cases the risk is not worth the reward.

If you are forced to make a counter offer keep in mind these three tips:

  1. Attempt to understand the buyer's position

    A negotiation is never a one way street. In order to create a sale, both parties must feel they are receiving a good value. Learn as much about the buyer, including their background and reasons for making their initial offer, as possible. By doing so you may able to find common ground that can create a successful sale.

  2. Use the give and take technique

    When making a counter offer, think in terms of, not only what you want, but what you might be willing to give up to make the sale happen. For instance, if you are asking for a higher price, can you help pay the buyer's closing costs or perhaps pay points to help them secure lower payments?

  3. Emphasize the positives

    In writing your counter offer you may want to emphasize the areas that you do agree on before you begin asking for modifications. For instance, point out all the areas of the original offer that are acceptable. This might include the closing date, the possession date, the down payment, the price, the inclusions and exclusions, the financing type, specific conditions or contingencies, or even something as simple as the size of the earnest money deposit.

By taking the time to evaluate each offer and establish a negotiating strategy, based on an unemotional analysis of the market and your needs as a seller, you will be far ahead of your competition.

Comments

By Leanne Finlay,  Thu Dec 3 2009, 00:22
Just as important as having an offer to consider is the question of 'who' is the buyers agent. Are they experienced? Is their presentation of their buyers offer solid, and professional, or do they seem like maybe they've never even met the buyers? Does your agent believe the buyers agent will do a good job with their buyer client during the long wait until closing?

The agents involved can bring about a meeting of the minds of the parties, and if both agents are highly skilled, both buyer and seller benefit. Even if one of the agents is newer, the more experienced agent can lead the way, and help ensure a good transaction.

Watch out tho when you're seeing a buyers agent who doesn't seem to care about the buyers, doesn't seem to care about details, or is pushy, or too aggressive. If your warning bells are going off, sit back, and ask for some private time to speak with your agent alone. Insist on it.
By Nick Alameddin,  Thu Dec 24 2009, 16:46
Selling a home requires patience and good negotiaiton skills, it's very important that you have a good agent that knows how to navigate the sale on your behalf.

It's important to know that people like to feel that they won, what ever you counter back must alway be a win-win. having a counter with win-loose or loose-loose will ultimately fail.
By Aaron Catt,  Tue Feb 2 2010, 08:48
Negotiations require a firm understanding of "facts" not
feelings or emotional response. Your agent will/should help you remain rational throughout the process.
By Susan Gobrial,  Fri Feb 19 2010, 04:31
I agree with Aaron because sometimes the seller is too attached to the house and have unreasonable expectations so educating the seller of the current market value is always a nice way to put things in prespective.
By Johnny Yankoviak,  Mon Mar 15 2010, 15:05
Also, the highest price doesn't nessesarily make the most sense, if the offer is loaded-up with a lot of contingencies.
By Cinnamon Boffa,  Wed May 26 2010, 12:16
If a buyer is willing to run away because a seller counters the offer, let them go. The buyer has to want the home not just to steal the home. Prices for most homes are good right now and so are interest rates. Both buyers and sellers should feel happy in the end that they both got a good deal. Agents need to remain rational also.
By David Dubin,  Wed Jul 21 2010, 06:16
There is a key consideration that has been left out, in my opinion. That consideration is the goal or need of the seller. Every seller wants to make the most from the sale of their home, but they do have an amount that they must have before they agree to a sale, if only to be able to buy their next home. Another goal/need of every seller is to sell the property within a specific time frame. Their real estate professional needs to understand both the financial and time frame needs of their sellers and when evaluating an offer, work toward finding areas of acceptance for both the seller and the buyer.
By Fran Rokicki,  Thu Nov 4 2010, 13:29
The Sellers are the ones, who decide which offer to take and where they want to go with the negotiations. The Buyers decide if they want to work with the Seller or move on to another property. It all depends on the needs and wants of both parties of the transaction. Agents pass on the information to their clients. When all parties are expecting good results, the transaction seems to go, that way.
By Karen Parsons-Fiddler,  Tue May 3 2011, 09:04
Usually we can make things work...since both sides want to make the deal work. But it doesn't mean that either side has to "roll over"....the goal is to buy and sell at a fair market price. If everyone has that in mind, then things work out better.
By Darren Wisniewski,  Wed Jun 22 2011, 13:32
Great advice all!
By Frustrated,  Fri Aug 19 2011, 08:07
Then you have to depend on the banks and appraisers to tell what your home is worth up against shortsales and trashed forclosures...what do they care they make their money either way! Way to kill the deal! I understand having an estimated market value but if both parties agree to the price who the hell is the bank to say otherwise?!
By Marlis Dunn,  Wed Nov 2 2011, 06:14
I am a seller, who feels attacked on all fronts and having lost in every part of negotiating. Fair value of the appraisal of our house was 629,000. We listed at 579,000 for fast sale, received an offer of 569,000. We countered with 575,000 and taking care of asbestos and oil tank removal. This is when it gets ugly. Buyer brings a 30 page inspection report and based on this demands 18,000 to "repair". There was nothing to repair, they were asking for upgrades, like new faucets, sinks,roof, which could show was new, electrical upgrades, which I had proof was done 2 years ago,etc. We agreed to meet halfway, and throw in garden furniture and urns etc and pantry shelves, and valuable lighting for a fast sale. Then the appraisal came in at 552,000. We contested the appraisal, because, They used only the comparison of last sale next door. This was a cheap construction, aluminum siding, aspalt shingle roof, no landscaping, low end everything. Ours is a stone house, slate roof 5 years old, new upgraded high end upgraded kitchen $120,000, iron fence, paver driveway, patios (2) and 1 deck, solid plaster walls,hardwood and porcelan flooring, fireplace, fountains etc.
2nd appraisal was done by same guy, Came back with exact same valuation, stating slate roof, copper gutter, fencing etc. did not mean anything, the only thing that mattered was the most recent sale, (a forced sale).
We agreed to a new lower price of 252,000 and took back our $5000, realtor agreed to $2500 credit out of their pocket and buyer still insisted on all the furniture. At closing she walked out, because we refused to give her $800 for two chairs the handy man had thrown out. Our attorney told us the buyer was in breach of contract. Advised us to just settle for half of the amount. These were chairs in need of restoration, which we said she could have, but were not worth anything unrestored. We agreed. Meantime buyer sends a letter of "time is of the essence". Now the snow storm! A patio umbrella, included in the sale, broke. Buyer wants $395.00. I can replace it with $39.00.
I asked attorney how can we get out of this contract. Can we send a letter'Time is of the essence"?We can not, unless we pay realtor commission $33,000 and all fees incured by seller.
How would any of you feel with a deal like this? I am completely depressed, and feel beaten up. After all of this I still have to pay a minimum of about $5000.00 for the oil tank removal and asbestos.
I just had to vent, because I have been reading all these comments, and nothing is in the favor of the seller, who has put his heart and soul and hard earned money into his house.
By Shawn Rosa,  Tue Dec 13 2011, 10:36
sellers should expect at least a few low ball offers in this economy and just let it roll off their back - many take it personally and get very upset
By Millie Valentin ,  Thu Apr 26 2012, 13:07
When I work with my Sellers I tell them my job is to present all offers as low as they may seem, rarely have I seen the 1st offer accepted!! The sellers can counter and come back higher, Buyers always want to see how Motivated Sellers are! To Cindy I'm so sorry that you went through all this but I always tell Sellers to get a *** Appraisal ** done at first we never want to over price a house but I definitely don't want to under price! I work all the way to the end and beyond to get the Sellers a Fair Market Value Price on there house!! Even more!!
By Tiffany,  Mon Apr 30 2012, 00:07
We are trying to sell our house too. We bought it 5 years ago for 115,000. We have put about 20,000 dollars into the interior. well since homes are selling for less, we listed it at 121,500 and are including 6 new major appliances. Do you think thats enough, or should we offer more incentives? Dont want to price it to much lower since we still have most of it 2 pay off, but want to get out quick because we already found another house.
By David R Indermill,  Wed May 30 2012, 22:32
Hi Tiffany,
What I have listed properties for in similar situations like yours. I would list the home in a value range marketing structure. For example on your home,
$99K to $125K. As the Seller you want the maximum exposure and pricing it
aggressively you achieve that. You can always counter offer higher to get the
sales price higher. Typically when I've done this on any price range including
when I have listed and sold $1M-$5M plus Homes. Goodluck and I hope this
helps.
By David R Indermill,  Wed May 30 2012, 22:39
Hi Cindy,
I read your in depth report above and I empathize with you 100%.
Based on what I read, your Agent did not advise you correctly. 1st off I would demand a 2nd appraisal by a 3rd neutral Appraiser. 3rdly, I don't aggree with your attorney all the way since you did not get a full price offer. That's how it is structured here in California. I don't quite understand your agents rationale since you as the Seller always have options and have the right to negotiate and counter their offer. You were more than fair to meet them half way.
By Matie,  Tue Jun 26 2012, 05:43
The agents involved can bring about a meeting of the minds of the parties, and if both agents are highly skilled, both buyer and seller benefit. Even if one of the agents is newer, the more experienced agent can lead the way, and help ensure a good transaction.
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By Carmen Brodeur- Top 1% Realtor,  Tue Jan 14 2014, 06:59
Good post.
By Judi Monday, CRS,  Fri Apr 11 2014, 08:43
When considering the offer be sure to evaluate not only the price offered but also the terms.
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