For you house flippers out there, do you always counter an offer in some way? We received a good offer today, slightly below list price and a little high on the buyers closing costs but overall it is good. I would like to counter with a few thousand less in closing expenses paid, however the offer is pretty good. I don't think we will have any problem selling this house but with it getting close to the holidays it would be nice to get this one locked up. The main problem I see with paying such high closing costs is that if there are any problems with the appraisal we may need to lower the price slightly. We could always reduce the closing costs at the same time but that may cause more problems. I would prefer to address it now.
What do you other flippers do? Ever accepted a deal out of the gate with no negotiation when it was below list price? I think people like to feel like they got a deal and some back and forth usually makes them feel like they did.
In situations like this, we usually call up the agent and do a verbal counter or ask them which is more important to the buyer: Closing costs assistance or purchase price.
They will generally give you a feel on what you should do with the counter. During a slow time in the market, a bird in hand is better than two in the bush. So don't lose them!
If the offer was reasonable, I'll accept it.
Once I had a person offer me 95% of my asking price, in cash. I countered. They got offended and bought the house down the street.
Moral of the story: Pigs get fat... hogs get slaughtered. I lost sight of the fact that a good offer is a good offer.
I agree with Aaron on this. Don't let a good buyer get away for a few dollars.
It depends, but better to keep it moving! Don't lose sight for $$. Might end up costing you more..
Thanks for all the comments. When the written offer came in, the closing cost help was even higher than the agent said it would be. We ended up countering with an increase in purchase price to make up for the high closing help. We will see what comes back
Chiming in late, but the strength of the offer overall depends on more than just the offering price. How well qualified is the buyer? How quickly can the buyer close? How good is the earnest money deposit (a higher deposit generally signals stronger commitment by the buyer, minimal deposit could mean--meh, I could take it or leave it). What contingencies come with the offer?
If the offer is strong in all these respects, by all means, take it! I also like Justin's advice about consulting informally with the buyer's realtor.
Hope you are inclined to update us on the outcome.
I will almost always counter, even if it's just asking to be allowed to choose what day or time the closing will be...
To understand why, see my Tip #6:
@Nancy Roth I went back with a price close to asking and agreed to the higher closing cost assistance. They agreed and we are moving forward with the contract. My biggest concern after that was the appraisal but it came in high so we are on our way.
@J Scott I have read a couple of places about the art of negotiation and making the other party feel like they got a good deal. That is where this question stemmed from, wanted to see others take on it. I must have read that blog post of yours a while ago or maybe you have similar verbiage in your book. That could be where my question came from... Thanks for the link!
Join the Largest Real Estate Investing Community
Basic membership is free, forever.