Understanding a counteroffer

Question: Dear Kari, My husband and I have been making offers on homes, but we always get a counteroffer back. Could you please offer us some advice? Answer: First, let's start with the understanding of the definitions of what an offer and counteroffer is. An offer is a specific amount of money and terms put forward, usually in a written contract, for consideration by the sellers of a particular piece of real estate. The sellers then have three choices. They can choose to accept the offer, counter the offer, or reject the offer. A counteroffer is the response to a previously made offer and basically agrees to the offer with the stated exceptions spelled out on the counteroffer. In other words, when a counteroffer is created, it automatically rejects the prior offer or parts of the prior offer. This requires an acceptance under the terms of the counteroffer, or there is no contract. The original offer is dead. Countering back and forth is a typical part of the negotiation process between the buyers and sellers. Keep in mind that both sides of the negotiation table are under tremendous stress, as the outcome is unknown. Each time a new counteroffer is created by either buyers or sellers, this has the opportunity of rejection of the original offer and/or previous counteroffers. It is good to know that sellers rarely agree to the first offer. Frequently, the sellers will make a counteroffer, pushing the decision back to the buyers. The buyer's choices at this point are to accept, reject or counter the counteroffer. This process can go back and forth a number of times, depending on the particular issues being negotiated. Here comes the tricky part, that just because one party (buyers or sellers) agreed to terms or items in one round of a counteroffer, those terms may be changed in the next counteroffer. Some buyers and agents might be so caught up in tough negotiations it might be forgotten that sellers have the reserved right to accept another offer from other buyers at any time during the negotiation processes with the first set of buyers. Seasoned real estate agents will tell you this happens all the time unfortunately. Some real estate agents say the happiest buyers and sellers were flexible and able to compromise easily. Be aware it is common for either the buyer's side or seller's side to become offended and close down and walk away from the deal completely. In the event this takes place, it is almost impossible for even the best real estate agents to remedy the situation. Buyers and sellers should try to view a counteroffer as an opportunity for a positive outcome. Keep in mind this is just the beginning of the process of the sale of the property, and there are many other hurdles to overcome before the closing of the sale. The ideal situation is for both sides to realize a compromise and move forward with a firm sale closing the deal.