The Counter Offer
The most common response to an offer is the counter offer. A hypothetical situation may evolve as follows: An offer of $190,000 is made on a home that is listed for $200,000. The offer may include Seller paid closing costs in a certain dollar amount equal to as much as 2.5%-3.0% of the loan amount, a closing date and possession date that is convenient for the Buyer, a home warranty to be provided by the Seller and certain items of personal property that would not ordinarily be considered real property, such as window treatments and patio furniture. The Seller may respond by counter offering the Buyer's offer at $196,000, agreeing to pay the closing costs, changing the closing or possession date to a more convenient date for them, and agreeing to leave the window treatments but not the patio furniture. The best course of action is to settle upon the terms of the contract (everything but price) in the first go round. Assuming these changes in the terms are acceptable to the Buyer, he counter offers on price at $194,000. Now you are only $2,000 apart on price, so the Seller agrees to split the difference and we have a deal that everyone is happy with at $195,000. There is one important point to remember: once the Buyer or the Seller makes a counter offer, the previous offer (or counter offer) is no longer valid and you cannot go back to that offer except by making another counter offer in that amount. If the Buyer or the Seller reject outright any counter offer, then the deal is dead, although the Buyer may always have the option of presenting a new written offer with terms they feel might be more acceptable to the Seller.
This entire procedure is handled by the Buyer's Agent representing the Buyer and the Seller's Listing Agent representing the Seller. It is very unusual for the Buyer's Agent to speak directly to the Seller or for the Buyer to speak to the Listing Agent during negotiations, and it is highly unlikely that the Buyer and the Seller will speak directly during this time. This protects the Buyer and the Seller from inadvertently disclosing some information that may damage their negotiating positions. Once the contract is agreed upon and signed, there will be several opportunities for the Buyer to speak to the Seller to ask questions about the house and neighborhood.
