A Quick Look at Seller Counteroffer and Negotiation Strategies
Avoid home selling stress by developing a counteroffer and negotiation strategy before receiving your first offer.
Now that you and your listing agent have reviewed purchase offers and picked on what you feel is the right offer for your home, it’s time to start with counteroffers and negotiations. The negotiation process can be stressful for sellers, especially those who don’t take the time to prepare ahead of time. The best way to eliminate this unnecessary stress is to sit down with your North Carolina real estate agent and discuss and develop a counteroffer and negotiation strategy before receiving your first offer from a buyer.
As a seller, you should determine what is important to you before receiving offers. Is price the most important factor? Do you, as a seller, want a contract with few buyer contingencies attached? Are you willing to offer seller concessions to the right buyer? Knowing the answers to these questions ahead of time will help your listing agent provide more informed guidance to help navigate the negotiation and counteroffer process.
For those of you who are new to the home selling process, let’s take a general look at counteroffers and seller negotiation strategies.
What is a Counteroffer?
In a real estate, a seller uses a counteroffer to accept some of the terms of the buyer’s initial offer while modifying other items. The seller then sends the new version of the offer back to the buyer for approval and acceptance or a counteroffer. Buyers and sellers continue to counter each other until both parties agree to terms and sign the offer turning it into a binding contract.
Review Offer and Prepare a Counteroffer
A certain amount of give and take between buyers and sellers is part of the negotiation strategy. When you first sit down to go over the offer, be sure to review your home selling goals with your listing agent. Then, start looking at the offer for items which are unacceptable to you. This could include price, time frame for closing, the wording of the inspection contingency, a request for seller concessions, the sale of buyer’s house, or other terms.
Example of Counteroffer Negotiation
Here’s an example of a typical offer/counteroffer negotiation on a home a seller listed at $249,900.
- Initial buyer offer of $225,000 with closing in 60 days and are asking for the seller’s new refrigerator (which wasn’t listed as being included with the property) and home warranty paid for by seller.
- The seller counteroffers with price of at $245,000, eliminate the refrigerator, agree to home warranty and want the closing in 30 days.
- Buyers counter at $230,000, but want closing at 45 days.
- Sellers agree to 45 days, counter with a price $239,00 and offer to pay annual HOA dues of $500.
- Buyers accept sellers last counter offer agreeing to the price of $239,000 and HOA payment.
In the above example, the seller started with a bottom line sales price of $235,00, which they determined in the early stages of the home selling process with the help of their listing agent. Instead of splitting the difference on price, which is a common negotiation tactic, the seller tossed in a last minute incentive of the HOA payment. This preemptive tactic showed goodwill by the buyer, was unexpected by the seller and may have been just enough to get the seller to accept the offer at a higher price than they would have agreed to if they split the difference.
Remember, don’t take the counteroffer and negotiation process personally. Remind yourself that this is a business transaction, and all parties are looking to protect their interests. Also, remember that real estate negotiations and counteroffers are give and take. Trust your North Carolina real estate agent and take heed of their advice as you participate in the process.
Thinking about listing your home for sale in North Carolina? Red Door Company offers the experience and expertise to helps sellers like you list and sell your home at the right price. Our home selling strategies are based on a proven model that has served our North Carolina real estate team successfully for ten years. Contact us today to learn how we can help you sell your home in Raleigh, Durham and Chapel Hill, on your terms and at your target price.