What’s a counteroffer?

When you receive an offer, you can accept it, reject it or make a counteroffer— a move that opens negotiations with the buyer.

Unless you’re being offered full listing price, many buyers expect you to make a counteroffer, which is why many make an initial offer that's lower than the asking price (and lower than what they’re willing to pay).

What should a seller prioritize?

Before you start negotiating, you’ll want to know what you’re hoping get from the buyer. Obviously money is important, but it’s not everything. There are other factors to consider when crafting a counteroffer, like timing.

Sit down with your agent and have an open discussion about your goals. Do you want more money? A faster closing? Fewer contingencies? When you review these kinds of questions with your agent and have a crystal-clear sense of your priorities, the negotiation process goes a lot more smoothly.

Who has more leverage?

Ready to play hardball? Hold up, slugger. First you have to consider your position on the field. How much negotiating power do you really have? The answer depends on several factors.

A lot depends on your local market conditions. If you’re in a buyer’s market, you may have to make some concessions to secure an offer. If you’re in a sellers’ market, you may be able to persuade a buyer to offer more money for the house or to let go of some contingencies.

Your timetable will also impact whether you have the upper hand. If you’re not in a rush to sell, you may be free to negotiate more aggressively. If you’re in a time crunch because, say, you already bought your next home and don’t want to pay two mortgages at one time, your hands may be tied.

Confer with your agent. She can help you objectively assess your position and determine the right negotiating strategy.

How long can this go on?

Don’t worry, it only feels like forever. 

When you make a counteroffer, the buyer can accept the new offer, reject it or make another counteroffer.

This volley can go back and forth, and potentially end in a stalemate, unless you or the buyer puts an expiration date on your counteroffer. This can be a smart strategy for the seller because it puts pressure on the buyer to make a decision. It also gives you the ability to move on to the next bidder if the buyer tries to stall (chances are, they’ll do this so they can look at more homes without giving up yours).

It’s not unusual for the first offer to be the best one, and sellers often see the most interest from buyers in the first month the home’s on the market. If you get a good offer right off the bat, start negotiating. Maybe you’ll get a better offer. But maybe you won’t.

Which negotiation tactics are most useful?

The actual negotiation is the job of your agent, who is experienced in real estate deal-making. But you should still strategize with your agent before they make that counteroffer for you. Here are five ways you can nab a better deal:

Avoid making an emotional decision. It’s easy to get caught up by the emotional bond you’ve formed with your home. The back yard might be where you got married and that cozy office could be where your small business was born. But you have to detach yourself from your home. This is business.

Know your bottom line. Before moving forward, figure out the very minimum you need to get from the deal. That will give your agent a baseline when opening negotiations.

Negotiate a clean offer. You want an offer with as few contingencies as possible since contingencies give a buyer the opportunity to back out of the deal. But some contingencies— appraisal, inspection, financing— can’t be waived by home buyers who are obtaining mortgages as they’re required by mortgage lenders. Still, if you have multiple offers to choose from, you may be able to persuade a buyer to waive certain contingencies, such as radon or termite inspection.

Offer a home warranty. In a buyers' market, a low cost way to make a deal more appealing is offering a home warranty— a plan that covers the cost of repairing home appliances and systems, like HVAC or hot water heater, if they break down within a certain period of time (typically a year after closing). Home buyers love this security blanket and the standard one-year basic home warranty will only set you back $300-$500.

Don’t overlook the closing date. From accepting an offer to closing, the process typically takes 30-45 days. But in most cases, the faster you can close the better, especially if you need the cash to buy your next home. A quicker closing has to be feasible for the buyer, however, and some types of home loans take longer to obtain than others.

Should I start a bidding war?

If you have more than one offer on the table, you might be tempted to pit buyers against each other and watch them duke it out for your home. But think twice before you do: This strategy can backfire. Buyers may walk away in frustration. 

Rather than starting a bidding war, ask all buyers to come back with their “best and final” offer by a certain deadline (say within the next 24 hours) and then choose the one that’s right for you.

It’s good to give and to receive.

At the end of the day, receiving an offer is a good thing. It means you’re getting closer to a sale. But you may have to give a little in the negotiations, too. Keep your head on your shoulders and you’ll be all the more likely to get what you want.

Source www.houselogic.com/sell/how-to-sell-step-by-step/negotiating-a-house-offer