A real estate counter offer is generated by the Realtor for the home seller.
After a buyer has submitted an offer to purchase and the terms are not agreeable to the seller, the counter offer comes into play. The agent and seller will comb through the offer and decided what the seller is not happy with. A counter offer states that the seller has accepted the buyer’s offer subject to the following changes to the contract.
This may sound simple enough, but the counter offer can get complicated.
The most important fact to remember is the purchase contract is the starting point. A counter offer is to offset any unwanted terms. The original purchase contract will remain. The purchase contract will not be rewritten. The rewriting comes in the form of the counter offer.
Here is an example:
The house is listed for sale at $350,000. The purchase contract from the buyer is $330,000, 60 day escrow, closing cost of $5000, and they want your refrigerator. Here is California, there are 12 pages to the purchase contract. I call it the “rules to the game” The most important pages are the first 4 pages. These pages are where the important money matters are contained. Back to the buyers wants. Which is more than the seller is willing to give. The agent works up the counter offer according to the sellers’ direction. It could go something like this: Sale price to be $345,000, no closing cost, 45 day escrow and yes they can have the fridge.
Here is the most important step to remember in the counter offer process
THE PURCHASE CONTRACT MUST BE SIGNED WITH NO ALTERATIONS. WHY You may ask? Because, the seller will accept the bulk of the terms, just not these few. Hence the changes to the purchase contract. The counter offer will have all the changes listed and will also agree to the remaining terms of the contract.
If the buyer agrees to the seller counter offer to the purchase contract, all is good. Open escrow. If the buyer doesn’t, well that is called a “counter to the counter”. The buyer will state what they accept from the seller counter and insert what they don’t like.
The most important point is everybody must sign the purchase contract to start the process of conversation leading to total agreement between parties and open escrow.