How to counter-offer an offer on a house?

Your realtor should advise you and they should fill out and deliver a counter offer for you.

All you have to do is decide what is acceptable. I would not counter for more than you really want in the hopes that they come up on theirs. Just counter with what it will take for them to buy the house. There can be a mix of money and repairs done, or allowances for certain items.

I made an offer on a house with a bad roof (not this one, though it does have a bad roof). My offer considered the fact that the roof would have to be replaced. They came back asking for a higher sales price, but would give me an allowance to fix the roof. Worked for me.

Jena

 

Depends on how low the low ball figure is from what you were asking, but. I would expect that I would prob get half way between what I was asking and what the first offer was. So, I would counter back with a price that was half way between that figure and the asking price. Confused? OK here are some bogus figures since I have no idea what you are asking and won't ask.


asking price 60,000
low ball offer 40,000
half way 50,000
your counter offer 55,000
their counter, counter 50,000 accepted by both (hopefully).

If you were willing to do some repairs you can subtract that amt from what you asked and come up with another figure.


Kim (jumping up and down with you)

 

Legally, it's a written offer. Once you counter offer, the original offer is cancelled. If they counter your offer, your offer is then cancelled...until you both decide on a fair price.

If you're dealing with an agent, let them do all the work. It's what they're paid to do. They have generic forms that they fill out with your info and counter, and they'll deliver the counter offer for you.

 

Only if it is workable do you want to counter. If it is too low, reject it. Keep in mind, you can only engage in one contract at a time- if you are working with a realtor. If it is too low and another offer comes in that is more to your liking, you are stuck with the one you are working on at the time until you get to reject it. "Time is of essence." Also, if you counter, give a time limit for a counter back; put it in the contract. Your agent should know this but newer ones sometimes don't, or they forget. Don't get caught in a waiting loop. You go cg :yeeha:

 

Great advice already given, except for this thought:

After letting your agent do the work for you, hold fast to your guns. every thousand dollars represents equity to you.
Most folks give low ball offers. You would be surprised how many people take the first offer, loosing thousands of dollars.
A good friend of mine low balled a lake house once, and won HUGE. He was willing to pay $65,000 of the $77,000 asking price. He offered $28,000, and the sellers accepted. With cosmetic work, the place would now sell for $100,000, and more if he subdivided the extra land into lots. I believe that there are laws now limiting how low you can offer, but I am not sure.
Think of the thousands of dollars in terms of weeks you would have to work to earn that money.

 

If you have had that much interest after only 2 weeks then I wouldn't be in any hurry to drop the price significantly. Right now the wind is blowing with you. Interest rates are still pretty low and the economy (short term) doesn't look too bad.

I think the biggest risk you face by toughing it out is an unforseen shock to the economy that would tank the housing market (use your imagination). When you counter you might ask the realtor to pass the (potential) buyer a message..... are they willing to risk losing the house over a few thousand dollars.

As usual, just my 2 cents.

Mike

 

Hello,
If you just put the place up for sale a few weeks ago, I wouldn't be in
such a hurry to accept a lowball figure. You could be losing thousands.
I would wait and put it up for sale in the spring, if you can wait that
long. Good luck!
James in Houston

 

Is the low ball really to low or is it a might low.

My granddad always had a formula he used "Hassel Quotient VS Profitability" I can't remember him ever sweating a deal. If the hassel is worth it in profit Counter if not consider taking it with a provisio. Maybe some consession you want they can live with.

As a potential buyer looking at houses I know I only make 2 offers. Then no matter how good a place I walk away. Like most I lowball it just to test the waters then I give what it's worth to me offer. My wife has gotten really po'd at me when we were looking for a truck because I used this technique on that decision as well. Many car salesman were left with that "what happened" look on their face after all it was just a $1000 more and surely I would go that. Nope. Offer, Counter, Done.

Good luck and let us know how you make out.

Kenneth in NC

 

countrygrrrl I just reread the post and noticed the "potential buyers are real estate investors" part. I've had to deal with that type before. They want everything for about 60% or less of value. I guess they do have to put out effort and cash to fix a place up but they (all I've met so far) just feel slimy. Counter Offer but make it as close as you can to what your ready to Close it for. These RE investors are real jerks most time and have many, many properties to choose from. Cash is king.

I hope you get what you want out of the place.

Kenneth in NC

 

If your agents are as experienced as you say, you should listen to their advice. They should know what the current market is and the value of your house. Are the other 4 properties that have been sitting some for a year just like your house ? Perhaps your house has unique features that the others don't. Keep in mind that investors have the money to invest or not. They may have offered a low offer only to see if they could get you to react to it. If the home is worth what you are asking for it, someone will buy it. Maybe not these investors. Best of luck to you. Don't let your anxiousnes cost you $. * jumping up and down*

 

RRRRRRRRRR

does this mean that you will start over repainting somewhere?

 

Investors typically like to use as little cash as possible and to get terms. Maybe you could get closer to your asking price if you were willing to carry a note? Just a thought.

 

The best way to ascertain your potential buyer's "top dollar" figure is to find out what their agenda for the property is. Real estate investors are easy, as buyers go, because they are not being guided by emotion or dealing out of exigency, but rather are thinking in terms of hard, cold profit. If you know what they want to do with the property, you can do the math the same way they've done it and thus figure out what their bottom line should be.

Both buyers and sellers are often reluctant to ask what the other's game plan is. But questions such as this are fair, and can be posed by your agent to the buyer's agent, or by you to the potential buyers directly. Is this seller looking to rent the property "as is"? Fix it up and rent it? Tear it down and build something else? Flip it immediately? Depending on the answer, the economics of the situation (and hence the buyer's "bottom line") will be very different.

Investors base their decisions on a surprisingly different set of variables than homeowner-buyers do. Depending on the anticipated use, they will look at a weighted combination of three factors: (1) the value of comparables in the area, (2) income stream, and (3) cost to rebuild. The "income stream" method of valuation is probably the most significant factor to investors in residential real estate. Significantly, it is the one that sellers, such as you, are probably giving little or no thought to. The "income stream" method of valuation is based on a black-and-white formula that considers what investors are currently demanding in terms of return for the particular type of investment ("cap rate") and the anticipated net operating income (gross rental receipt minus anticipated expenses, including an adjustment for deferred maintenance). If your own real estate agent is not well versed in the area of real estate investment, surely he or she has a colleague in the same office who is. That person could take a quick look at your property and probably give you a real good idea what the value to an investor would be.

Hope that helps!