Let’s make a deal!
The offer is in…you’ve got your fingers crossed. And you are probably feeling anxious. When an offer is presented, two things are almost always certain: the seller knows the buyer most likely will pay more than their offer, and the buyer knows the seller most likely will take less than the list price. Finding that happy place for both is all in the negotiations.
It can be complicated.
The seller can respond to your offer in several different ways: accept, reject/counter, delay during the time period for acceptance to seek out other offers, or do nothing. Because the seller has so many options, your initial offer may be your only opportunity to buy this house. And this becomes more certain if there are multiple offers on the house. Although the existence of multiple offers is not confidential, what is in other offers is. Even your broker will not know what those terms are. But having a buyer broker who is informed about the status of a particular house and can negotiate on your behalf, and for you alone, is key to a win-win.
You’d think a full price offer would seal the deal.
Or the fact that your offer came in first before any others. But not necessarily. There might be other factors, especially in multiple offer situations, that the seller will consider besides price or order of receipt: Is it cash or loan? What is the buyer’s timeframe for closing? Can the buyer accommodate the seller’s timeframe? Does the buyer want a multitude of inspections, or very few? Does a cash buyer want an appraisal?
In a perfect world, the seller will accept your initial offer and terms.
Let’s say, though, that the seller counters your offer. What do you come back with? Now you are in the position of accepting, rejecting/countering, or doing nothing. Once again, you are faced with needing some of the same information your buyer broker provided when making your offer in the first place: days on market, price reductions, market conditions, comments the listing broker might have made in passing about a new job waiting for the seller, or wanting to move before school starts. And of course, whether there are other offers in or anticipated. And perhaps more important, does the house need work, and how much are you willing to pay? Remember, the market value of a house is what someone is willing to pay for it.
Meeting in the middle.
Often in a counter offer situation, the buyer and seller wind up meeting somewhere in the middle. The important thing to remember, though, is that any decisions about how your offer is presented and negotiated is made by you, the buyer, and not by your buyer broker.