Tuesday, March 6, 2012

Counter Offers Choices for Sellers

I recently ran across this situation while representing a husband and wife (Sellers). We received an offer from a buyer. After careful consideration, the Sellers decided to counter the buyer's offer. The counter offer contained some cleaning up of the buyer's original offer (identifying the title company and Natutal Hazard Disclsure companies to be used) and also included language to shorten certain contingency time frames the buyer was asking for. All in all, it was a very reasonable counter offer. The buyer came back and countered our counter offer asking for something else in return. While we were in the reviewing stage, another buyer submitted a different offer, which I promptly presented to the seller. The terms were better and it didn't require the cleaning up of the language that the first agent had failed to clarify. The Sellers had some choices here which I will point out. 1) The Sellers could accept the first buyer's counter offer. 2) They could counter the second buyer. 3) They could accept the offer from buyer #2. 4) They could respond to both with a multiple counter offer.

The questions becomes, if the Sellers decide to counter only buyer #2, can buyer #1 come back and accept our first counter offer and lock out buyer #2 even if buyer #2 has a better offer? The answer is: No. Once a buyer gives a counter offer back to a seller, it cancels the seller's obligation of his prior counter offer. Sound confusing? As a buyer, make sure you know that if you upset a seller in negotiations that you can't go back and say, "oh, I was just kidding, I'll accept your prior counter offer". It's completely the seller's choice at that point.

In this case, that was exactly what happened. The Sellers countered the second buyer. While we were waiting for a response, the buyer's agent for buyer #1 asked us what the status of their offer was. I told her that we countered another buyer's offer. They came back and immediately sent us an acceptance of our original counter offer. I explained to the agent that there's a saying in real estate, "Pigs get fat, but hogs get slaughtered." She said, "What!?" I explained that her buyer got very greedy at the wrong time and now they're probably not going to get the house because there is no legal obligation for the seller to sell once the buyer countered back our prior counter offer. That was an expensive lesson for them. My clients, the Sellers, are very happy to now have a better counter offer accepted by buyer #2. Gary Nobile , Realtor, MBA www.GaryNobile.com
(408) 247-4029

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