Counteract those counter-offer blues by negotiating the terms wisely
So, you search high and low and finally settle on the house you want to call home. You sit down with your real estate agent and hammer out the fine points of the deal. The offer to purchase is typed, your agent presents your offer to the seller, and... oh no! Rejected! The nerve!
Try to keep your emotions in check. In fact, it is rare for any first offer to be accepted in its entirety. Upon receiving your offer, the seller is faced with three options:
An accepted offer means the seller has agreed to all the terms and conditions, exactly as set forth in your offer to purchase. Congratulations! You are on your way to buying a home.
A rejected offer means the seller did not agree with the terms and conditions set forth in your offer to purchase.
- Counter offer
A counter offer means the seller agrees with some of the terms and conditions of your offer, but not all of them. The seller thus makes a counter offer to you. The counter offer may change the price or closing date, or add or remove conditions.
Counter offers: tips to help you negotiate your way to a suitable compromise
Once you have received a counter offer, you have three choices. You can accept the new terms and conditions, reject them outright (and look for another house), or you can work with the seller to establish mutually agreeable terms. Unless the seller is being extremely unreasonable, you will likely choose the latter. It’s time to negotiate, and here’s how:
- Choose your battles wisely
You may fancy yourself the Donald Trump of residential real estate, but do you really want to jeopardize the whole sale by haggling over the inclusion of comparatively insignificant items like drapery or a rug? Save your enthusiasm for the issues that matter most.
- Keep it real
The terms of the purchase have a much greater chance of being accepted if your offer is grounded in real market conditions, and not in the fantasy of getting something for nothing. Remember, the seller may be considering other offers. Bid too low and you risk losing the house to another buyer. Your Royal LePage real estate agent can help you determine just how much is appropriate to bid, based on his or her knowledge of the local housing market.
- Be a lover, not a fighter
There is no doubt that the give and take of negotiation can frazzle the nerves. But becoming combative when you hear something you don’t like won’t get you any closer to owning the home. Quite to the contrary. Remember the saying “you catch more flies with honey than with vinegar”?
A few pointers: Be polite and collaborative in any dealings with the seller or his real estate agent. Let the seller know you hear and understand their issues. Be respectful when disagreeing with or rejecting terms. Try to communicate your own wishes clearly. Be patient and helpful when misunderstandings do crop up.
- Know when to hold ‘em (and when to fold ‘em)
Prepare for negotiations ahead of time by knowing which terms of the deal you can compromise on, and which terms are deal-breaking must-haves (see Needs vs. Wants for help with this). Ensure your priorities are communicated clearly, and don’t be tempted to exaggerate your position. This is no time for bluffing, lest your bluff be called. And remember, negotiation is all about give and take, so expect to make some concessions. By establishing your position in advance, you’ll be able to handle a little of the give painlessly and with certainty.
- Know when to walk away
It is unlikely that you and the seller will be unable to come to mutually acceptable terms, but you have to prepare yourself for that eventuality. If it ultimately becomes clear that the seller will never budge on terms you deem vital (no matter how long talks extend), it is time move on. And you never know, sometimes just being prepared to walk away is what it takes to jar a stubborn seller into abandoning that firm position.
For expert advice about buying a home in your area and negotiating offers, contact your local Royal LePage agent: Real Estate Agent Search