One of the more intimidating aspects of home buying and selling is price negotiation. Counteroffers can occur before the home goes under contract and after inspections and appraisals. Being prepared to make or deal with counteroffers can give you a step in right direction to help the entire process go smoothly as possible. As always, you should rely on the expertise of your real estate agents to help you navigate the negotiations.
Selling a Home?
If you are in a buyer’s market, you may find yourself running into counteroffers more often. Take time to read through the counteroffer and discuss the possibilities with your real estate agent. They can take the time to reach out on your behalf to find out more information and see if there are any other concerns that buyer might have so that you can anticipate their needs in your counteroffer. Keep in mind that price isn’t the only negotiation tool you have.
Some buyers may be looking to move in as quickly as possible, so bumping up the closing date could be more valuable to the buyer than price point. If appliances were or were not a part of your original deal, you can add or leave them out of your counteroffer to make up the difference in price point. If you set a lowest possible price point that you are willing to sell your home for, try to still keep your counter offers above that. You’ll want keep in mind that after your home’s inspection or appraisal, negotiations may open up again, and you may have to negotiate further.
As we’ve talked about in this blog, pre-inspections can help you prepare and even avoid counteroffers after an inspection. A pre-inspection will alert you to any upcoming issues or repairs so that you can either take care of them before putting your home on the market, or allow you to have the cost of these repairs worked into your price. If you plan to sell your home on a strict timeline, a pre-inspection will also give you more solid buyers upfront who are less likely to leave the midway through because of unforeseen issues.
Talk to real estate agent about your counter to their counteroffer to figure out what will work best for you as the seller while still enticing the buyer to accept or continue negotiations. If a counteroffer is just too low or unacceptable, do not be afraid to reject or walk away from the offer.
Buying a Home?
Negotiating a counteroffer can be challenging, especially in a seller’s market. However, you can use many of the same negotiation tools that a seller can use. Check in with your real estate agent to reach out and find out the seller’s concerns and interests. If the seller is using the pending sale of their home to finance their next home, they may be more willing to make a deal.
If the seller has not had a pre-inspection, you should keep in mind that the home could have issues that are pointed out after the inspection that would drive a counteroffer. You can ask to either have the repairs made before the deal is closed, have the cost of the repairs worked in as a credit to the buyer, or accept the flaw as-is assuming it won’t impact appraisal. If an appraisal comes in below the initial sale price, this can affect the amount a mortgage company is willing to give to the buyer which can lead to a counteroffer as well.
As a buyer, you want to keep in mind that the decisions of these negotiations will affect you much more in the long-term than the seller. You will literally be living with these decisions. Always talk with your real estate about the best option for continuing forward with a deal. If you see too many issues that the seller is not willing to negotiate into a new price or otherwise, do not be afraid to walk away from the deal.
Buying In A Seller’s Market
In most popular areas of Maine it is a sellers market right now. This means properties will often receive multiple simultaneous offers and often end up closing above asking price. It’s important to not get caught up in a bidding war mentality and risk paying more then you can comfortably afford. The best advice is to start with your strongest offer. Again, price isn’t the only factor a seller is looking at. Other options that might be appealing to a seller are flexibility on closing date to allow seller to find suitable housing, paying cash instead of getting a mortgage, or even waiving home inspections. If the seller accepts a competing offer, you might want to consider converting your offer into a backup offer. This would put you in second place, so if the first contract ends up being terminated you would be next in line. Another good option might be to include an introduction letter to share with the seller. This puts a face to the offer and gives the seller a chance to get to know you and your family. If multiple offers are very close, this small effort can make a big difference.
Looking for experts that can help you anticipate and navigate counter offers? Reach out to the experts at the Real Estate Store to find out more!