Congratulations! You have made the leap of listing your home with a licensed realtor and now you have an offer from buyers who would love to make it their next home. Now begs the question of how to counter the offer. Many sellers are often intimidated by the process of countering offers on their properties. The tolerance for aggressive offers and counter offers is can be unknown, but here are a few tips to keep in mind.
First and foremost, it is often not a question of dollars and cents when deciding what to counter offer, but rather the level of motivation. Sellers need to evaluate why they are selling in the first place to know where a good counter offer should land them. Most buyers are instructed to offer a lower amount than listing with enough room in anticipation of your counter, so it is wise to be prepared for less than asking price situations.
Here is a scenario. Your house is listed for $150,000 and you receive an offer for $137,000. What do you do next?
If your motivation to sell is low or you’ve had the home on the market for a very short amount of time you might best counter $1-2,000 below your original asking price. In our fabricated scenario, this would mean a counter offer of $148,00 or so. This communicates your intentions to stay firm on price, but willingness to give them a little.
If your motivation is very high to sell, countering back $2,000 above their offer is often a great place to land. It most likely will not scare the buyers since most expect a counter, but it also puts a little extra change in your pocket. So in this scenario a counter offer of $139,000 would be appropriate.
If you motivation lands somewhere in between, often the rule of thumb at Spica Real Estate is to encourage our sellers to ‘split the difference’. So, with this scenario, the difference between asking price and offer is $13,000. Counter offering $7,500 below asking putting the counter at about $142,500 is often fair.
Whatever your motivation or scenario, it is important to keep in mind all aspects of the offer, not just the purchase price. Items like buyer contingencies (like their house selling), cash or mortgage offer, and time of possession can all be negotiating points and help you land on an appropriate counter offer.