What’s a real estate counter offer?
Agents tend to throw around real estate terms like beads at a parade, without ever slowing down to be sure that our buyers and sellers understand what we’re saying. Recently, a client asked about the meaning of the term counter or counter offer.
According to Business Dictionary, the definition of a counter offer is:
Offer given in response to an offer. It implies rejection of the original offer and puts the ball back in the court of the original offerer who has three options: to (1) accept it, expressly (by replying) or by implication (by not replying), (2) issue another (counter-counter) offer, or (3) reject it expressly.
The short version is a counter offer is simply an alternative to the offer submitted. For example, Buyer Betty makes an offer on Seller Stan’s home for the price of $375,000. Seller Stan doesn’t want to accept that price, but is willing to sell for $399,000. Seller Stan’s agent would prepare a counter offer form to communicate that to Buyer Betty. Betty could then accept the counter offer, reject it, or send yet another counter to the seller.
Counter offers are just a way of negotiating in writing.
Wouldn’t doing all of these negotiations verbally be easier?
Sure. If you’re willing to take the risk that the other side will follow through with actually signing off on the final documents. But we’ve seen buyers lose out on houses before by trying to negotiate verbally and someone else swoops in with a written offer that’s acceptable to the seller. In Louisiana real estate, it’s not binding if it’s not in writing.
A word of caution about counter offers
A counter offer is also a rejection of the initial offer. If Buyer Betty decides that she doesn’t like Steller Stan’s counter offer and sends back one of her own, Stan can totally continue to review other offers and potentially take one without continuing his negotiations with Betty. As with any other negotiations, there are risk involved. Ask your agent for their expert advice!