You finally found a home you like in a neighborhood you can afford, and you love the whole area’s vibe – so you put in an offer that you thought was fair.
The seller didn’t outright reject your bid, but they did come back with a proposal that would change some terms of your agreement. This is known as a counteroffer.
What does this mean? Here’s what you need to know:
There’s no deal until everyone is in agreement
Essentially, what’s happened is that the buyer doesn’t wholly like your offer, and they’re trying to secure a better deal. By making a counteroffer, they’re signaling that they’re still open to your bid, but they want to negotiate a few things.
Typically, counteroffers from a seller involve things like:
- The overall size of your bid: Maybe you went 10% below the asking price, and the seller simply won’t go that low, so they counteroffer at 5% below.
- The size of your earnest money deposit: Sellers want to know they’re protected against a fickle buyer, and your earnest money is a form of security on your bid. It’s not unusual for a seller to ask for more.
- Inspections and repairs: You may (quite reasonably) want the property inspected and intend to ask for repairs, while the seller may be adamant that the house comes “as-is.” Or, they may want to limit how much time you have for inspections.
- Contingencies: Offers and counteroffers often involve contingency clauses, like how long the buyer has to get their financing in order or how long the seller has to move out.
Everything and anything may be up for negotiation, so that means you can accept their counteroffer, reject their counteroffer and move on, or make a new counter-counteroffer of your own.
Whatever you do, it’s important to remember that this is one of the biggest purchases of your life, so it pays to have an experienced legal eye look over your offer and real estate contracts before you commit.
