Forming a counter offer is part of buying a home. This holds true no matter if you are buying real estate to live in, or if you plan on using it as an investment. The fact of the matter is that the counter offer you make will have a lot to do with whether or not you get the home that you are interested in.
There are many steps that go into efficiently forming a counter offer. You may think that there is no art to this, but nothing could be further from the truth. When you deal appropriately with a counter offer you will have the best chance of closing a deal in the end.
Here are three steps to consider if you are faced with putting a counter offer together. By following these in order, you should have no problems having something to send back to the seller.
1. Before you do anything, consider the offer that the seller came back with after your original. In many cases you may find out that this offer is good enough to make a deal. But remember, you should be 100 percent comfortable with this before you decide to accept it. After you sign your name on the dotted line there is no opening discussions back up.
2. When forming a counter offer you want to remember that insulting the seller is a bad thing. Luckily, if they have already countered once, you know for sure that you are at least in the ballpark. For instance, if the list price was $115,000 and your original offer was $100,000, the seller may come back to you with a counter of $110,000. It is now your job to choose a number in between that you think is fair. Most people will agree that countering a bit more than the halfway point is a good idea. In the above case this would be an offer in the $106,000 range.
3. If you are tired of negotiating, and have done everything possible, you may want to consider a “take it or leave it” counter offer. In other words, you will counter with a final number while telling the seller that you cannot do any better. There is nothing wrong with doing this, but remember that you may get turned down. The seller has every right to say thanks but no thanks to a take it or leave it counter. As long as you are prepared to possibly lose the deal, you will not have any problems doing this.
As you can imagine, you do not have to follow the above steps in order when forming a counter offer. You may want to start out thinking about a take it or leave it offer; especially if you have gone back and forth with the seller on several occasions.
No matter what you do, make sure that you keep two things in mind when negotiating via counter offers. First off, you need to respect the seller at all times. They are going to try to get the best deal, and so are you. Additionally, you want to make your counter offer with mutual negotiations in mind. This means that while you want to get the lower price, you will still want to do what is best for both parties. In other words, try to be as fair as possible without compromising your position.
Overall, the counter offer that you make on a piece of real estate will determine how much money you ultimately pay. In turn, this will have a large effect on how long it takes you to profit on your investment.
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