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Thursday, January 24, 2008

What to do when you get a Real Estate Counter Offer

By Gloria Smith

The home buying process is not always guaranteed to be smooth and many buyers as well as real estate investors know this. Even though as a potential buyer you have offered a fair market price for the house of your dreams, sometimes homeowners are not readily amenable to it. It is for this reason that buyers and their agents should be equipped with the right negotiating skills that will help succeed in closing a deal.

It’s advisable that even before making a purchase offer, buyers should be properly informed about the vital aspects of the transaction. Find out if the asking price of the home you would love to buy is reasonable enough. Know that a residential property sold at more than 10 percent of its average market value could be considered overpriced. Check too if the house needs major fixing and the cost entailed as well as if the seller is really bent on disposing of his or her home.

So don’t be taken aback if after you have submitted your purchase offer, the home seller makes a second thought and counters your offer. There are even instances when two to three counter offers will be made by the seller if his or her selling price is not met.

Keep in mind that offering a low price is a good option most of the time. Avoid pressures that will make you increase your offer beyond your financial capability. The seller may expect much from you or the real estate agent may be a bit pushy but remember that you are the buyer and the decision is yours to make.

Real estate experts also point out timing is utmost importance when dealing with a counter offer. Normally, the sellers feel they are in control of the transaction if the buyer immediately responds to the counter offer. The negotiation is not giving the seller any stress hence, the feeling of being at an advantage. However, if the buyer gives a little time allowance say a few days or a week after getting the counter offer and informs the homeowner about considering other properties, that may make the seller think twice about asking for a much higher price.

Another strategy is to accept the property in an “as is” basis. This you can do especially if you included a home inspection contingency in your original purchase offer that would give you the right to check the house and request for repairs from the seller. You can keep your right to inspect, though, even if you agree to purchase the house “as is.” And should you find major defects later on, you can always decline to buy the property.

Buyers should know when to accept the offer and this would be if they feel that the counter offer is already closer to their own purchase price. But if in case the price difference is still very wide, then more negotiations will have to be made. Buyers who are more prepared will be able to work it out soon enough. Ensure that you have facts to support your purchase offer such as comparable selling prices, list of repairs needed and estimated costs. In this way, you can be sure that the seller will give you the necessary attention.

Learn more about what is included in a Real Estate Counter Offer to Addendum. Purchase this form for only $4.99.

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