When do you counter a buyer's offer?

Question

I'm reading posts from members who may or may not be making mistakes when countering offers from buyers on price.  What are the rules?  When do you counter offers if you think they are too low or how do you set prices so that you can get multiple offers?  Is this an art or a science?

Jesse T. · Answer

One metric to look at that is available on some of the real estate sites is the % of sale price to list.  It gives you an idea of the balance in the market.

In a lot of cases it actually is an argument against hiring a full price buyers agent.  If the market is pretty tight the 1 to 2% rebate will likely be bigger than the amount you can negotiate down on most properties.  That said even in a hot market, there are some properties just sitting because they are significantly over-priced.  I would use comps(recently sold) vs. asking price for the basis of an offer on those.

I see a counter of the asking price as a request to increase the offer.  I would move about 1/2 to my target price and see what they do.

On the sellers side you don't have much to lose on countering.  There are a few options if the offer is very low.  You can either explicitly ask for an increase of the offer or counter at asking.  You can also ask for support of the offer, there maybe something that one side is missing that is distorting the perceived value.  You also can use it to prod along potential buyers, have your agent say we have an offer we are reviewing if you get yours in by tomorrow night we will review both.  You should only have 1 counter out at a time, but there is nothing to stop you from getting multiple offers in at the same time.

Michell P. · Answer

There are no rules.

I tend to counter over anything and everything, b/c why not?  Actually it's kind of crazy how few buyers (or sellers) will counter these days.  They'll make one low-ball offer and then shrug their shoulders when the seller doesn't automatically accept.  And so many sellers counter back at full price.  Methinks they don't know what negotiating looks like.

Pricing is both an art & a science - and it's local to your market.  What works in Portland isn't going to work in Atlanta.  This is pretty much the main reason to hire a good realtor.