First-timer Buyer – The Seller countered my offer. What should I look for?

This is a series of posts to help educate first-time buyers or bring a repeat buyer up to speed on the current real estate process. In today’s post I discuss what to do if the Seller counters your offer with changes to your offer.


Well, at least the offer wasn’t rejected. The first thing to do is to understand the counteroffer. Read through the changes that the Seller made to your initial offer. In the majority of deals the only real change will be to the sale price. The seller may have also changes some other things, so you need to understand what the new terms and conditions of the offer are now.



The changes may be to things like the closing cost, especially if you had asked for a Sellers Concession to help cover those costs.


Perhaps, the Seller rejected that request or changed the amount that he is willing to offer as a concession. Discuss the impact of the changes to those closing costs with your mortgage person.



The Seller may have made changes to things like the occupancy. Maybe you asked for occupancy at closing, meaning that you want the keys to the property at the closing; however, the Seller has counter-offered to turn the keys over after a short period of post-closing occupancy. That post-closing occupancy that the seller wants could be anything from days to weeks. Make sure that there is a clearly specified move-out date in the Sellers’ request.

 


Also look at the terms of that post-closing occupancy. There should be a clearly defined daily rental rate for that post-closing occupancy and a clearly defined method for dealing with any post-closing occupancy damage that the Seller might cause (more on that in a later post). In most cases you will be expected to provide the post-closing daily rental rate, which is normally based upon the daily rate that you will be paying to cover your mortgage (principal and interest), taxes and insurance (sometimes shown as PITI). The Seller will be expected to escrow an amount equal to the PITI daily rate times the number of days requested and that should be specified in the contract.


The seller might have counter-offered with a proposed closing date that is further out than you had specified, perhaps to give himself more time to find a new home or to arrange his move. That’s OK, so long as the new turnover date fits your plans and doesn’t impact whatever rate lock you have on your mortgage. Check that with your mortgage person.


Here’s a good article on the back and forth of counter offers.



Many times these rounds of negotiations back and forth are conducted via telephone, with emails to confirm what has been said. Once you and the Seller have come to an agreement on the final terms and conditions of the deal, you and the Seller can initial the changes and sign the offer paperwork as it has ended up, which means that you and the Seller accept the new terms and conditions. Congratulations, you have a deal.



One of the more stressful situations that a buyer can get into is the “multiple offers” scenario. In that case the counter offer that you may receive is really a notification that the seller has received multiple offers and will entertain a second round of bidding from some or all of the original bidders. The advice is usually to submit your “best and final” offer in the second round. Having professional help to analyze the situation and the market is critical to help you make your second offer, should yo really want the house. Here’s a US News article on navigating that scenario. Many buyers just drop out of the bidding for the house at this point, but there is no reason not to make your best bid and see if that is accepted.


Norm Werner is a Realtor® working for Real Estate One in Milford, Michigan. Norms helps people buy and sell houses in Southeastern Michigan, in Oakland, Livingston and Macomb Counties You can contact Norm about finding a new home or about getting a Market Analysis for your current home by texting or calling him at 248-7863-2497 or click here to go to his web site and fill out Help Form for buyers and sellers.


To see all of the post that have been made to this series of posts go to the post series index.

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