Should I Counter Offer The Buyer Or Reject The Offer

In this housing market it is constantly shifting and changing every day. One thing I have noticed is some buyers are coming in with reasonable offers on a house and others submitting offers substantially below market value for the house. So what is a seller to do if the offer is so low they feel insulted by it? Do they counter the offer or just reject the offer.... There are some things to consider when talking with sellers about a counter offer on a house. First, is the buyer an owner occupied buyer or an investor purchasing a house/ it does matter when you are looking to counter offer on a house. For one, an owner occupied buyer has some emotional ties to the house. They like the house, it made their short list of homes they are considering, and they have envisioned themselves living in the house. If the numbers make sense for themselves financially they want to own the house. The investor on the other hand is looking at the house strictly from a cash flow standpoint and has no emotional ties to the house. if the investor can get the house for the right price they will buy it but will walk away if the number does not make sense to them financially (even for as little as a few thousand dollars). The second is the offer for the house and the terms involved. Is the buyer asking for closing cost assistance? If so, how much? Are they financing or paying cash? When do they want to close? Looking at it as just a sale price without taking into account the other terms of the offer could hinder you from making a deal. For example, buyer A offered $150,000 sale price with $4500 in closing costs and a close date 60 days out with a FHA financing loan. Buyer B offers $144500 cash with no closing costs and a 30 day close. Which offer is better? When i talk with sellers about an offer on the house; I discuss more than the sale price. Can you meet the close date the buyer wants? Is the net number after closing costs enough money for you to take from the house? I also run a comparative analysis that day to see what has sold and gone on the market or off the market to see what the trend in the neighborhood is (though you should be hearing that from your agent on a monthly basis to begin with). Also, how many showings have you had? What type of feedback are you receiving? How soon do you have to sell? Having all the information vital to make an informed decision at your fingertips and knowing the whole scenario is critical in this housing market as to whether to counter offer or not. I have been on both ends of an offer that was below market value. On the selling side I always recommend we counter with something...even if it is a token discount to see what the buyer is thinking. Usually by the second offer form the buyer we find out how legitimate the buyer is and whether we have a reasonable chance of a deal or not. I have been on the buyer side as well where the buyer said let's take a shot at this number. We do not know how motivated the seller is and they may discount down. Yet the buyer may be willing to pay the price the seller really wants for the house. However; if the seller just rejects the offer and does not offer any counter offer the buyer might feel offended and walk away from the house. Is there a right or wrong answer to offering a counter offer to a buyer? It depends on the individual situation and where the seller is on price and how realistically the buyer is on getting the house at a fair market value price or not. Dave diCecco Realtor/Broker Coldwell Banker United www.davedicecco.com