Buyer's negotiation tactic? Should we just have accepted?
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Does a counter-offer make the original offer expire immediately, or do you still have the option to accept it? If the latter, it seems like the rational strategy is to ALWAYS counter.
A counter-offer automatically voids the initial offer, certainly here. I don't know of any state in the U.S. where that would not be the case. Does anyone here know differently?
But, if I were the OP, I would not go back seeking the same price that was offered. That would appear too desperate and, sensing that, the buyer could easily come back with an even lower number. I would suggest that you make them an offer which was lower than your counter-offer, but not as low as their offer. Maybe they'll bite.
Just because it's a cash offer does not make it a "take-it-or-leave-it" situation. Counter offers are normal, so I can certainly understand why your agent suggested that you do so. I've done plenty of cash deals where the agreed-upon price was not the initial offer. But...the interesting thing about real estate is that every deal is different.
I feel your pain. When I was trying to sell my shore condo (just as the market was tanking), I received an offer that I thought was too low, as most initial offers usually are. I was told my condo was one of two they were considering. I figured that was a ploy to get me to accept their offer. My former boss (a part-time real estate agent) told me you ALWAYS counter. I countered, and they walked away and bought the other condo. I ended up having to accept an even lower offer later. That was a different time, though, and a vacation market is different to begin with. I don't think you were wrong to counter, if you think your place is priced fairly.
Good news- he counter offered, and we accepted! The inspection went great, and we are set to close on Aug. 16th. So HAPPY this is finally looking like the end of this first time selling journey!
Good news- he counter offered, and we accepted! The inspection went great, and we are set to close on Aug. 16th. So HAPPY this is finally looking like the end of this first time selling journey!
If this was a regular buyer I would say your realtor would be right in countering however with it being a cash offer cashbuyers rule the roost, they have all options available to them unlike those needing mortgages. As long as you were okaywith the price the realtor should have advised you to accept. A cash buyer is basically going to call the shots. I lost out on a number of short sales to cash buyers even when I was say 30k-40k over their offer. People like cash.
Cash doesn't necessarily rule the roost...unless you're dealing with crappy properties that can't qualify for financing. By the time the bank holding the note gets paid, it's cash anyway.
Our house had it's first offer placed on it last Thursday night. Our house has been hard to sell. Its a small house, athough totally redone, and our market tends to sell family sized houses, not houses meant for 1-2 people. Our house was priced $20K under appraised value, to match the market as best we could according to our realtors advice. The offer was 12K below that. The buyer wanted to pay in cash. I talked to my realtor, and told him we REALLY didn't want to lose this buyer, however, I would take his advice and counter or think about accepting. Since it was the first offer, my realtor felt we should counter to try to get the buyer just a little higher, as our realtor felt it was a low ball offer. The buyer wanted us to be ready to move out on Aug. 16th, so we offered to be ready by Aug. 9th, and met him over half way between his price and ours. We agreed to all other terms.
Got a call a few hours before our counter expired, the buyer decided to look at a house that is "just coming on the market on Monday" before he moves forward with us.
We are beyond sad we didn't take that first offer. We are waiting to see if we get any call back/interest from this buyer. Our realtor is pretty upset, and says this isn't how this normally goes. We are wondering if this buyer will submit another offer today that is lower than his first.
What has your experience been? Have you taken first offers before?
You asked for A.
The buyer countered with C.
You countered with B.
The buyer countered by saying he was no longer interested.
It is up to you to counter as in accept his original offer. That said, I think he is a bottom fisher and your chance has passed on by.
Priced $20K below comps on say $400K is 5% less. Him offering $32K less is 8% less. Not a bad deal. Just a little hurt there. Priced $20K less then comps on a $100K home shows seller desperation and many will take advantage of this and it can hurt.
The market is shifting. It has not gone from a buyers to a sellers market....yet....LOL
I do not have an answer as your personal and economic situation is the real controlling issue.
You asked for A.
The buyer countered with C.
You countered with B.
The buyer countered by saying he was no longer interested.
It is up to you to counter as in accept his original offer. That said, I think he is a bottom fisher and your chance has passed on by.
Priced $20K below comps on say $400K is 5% less. Him offering $32K less is 8% less. Not a bad deal. Just a little hurt there. Priced $20K less then comps on a $100K home shows seller desperation and many will take advantage of this and it can hurt.
The market is shifting. It has not gone from a buyers to a sellers market....yet....LOL
I do not have an answer as your personal and economic situation is the real controlling issue.
I agree, he is probably a bargain hunter who has no real connection to the house, but does see value, at his price. Probably was just throwing an offer out to a house that has been sitting on the market.
I think if you completely caved, he probably would take it.
But if you wait and drop the price a few thousand, I wouldn't be surprised if he ends up coming back with a similar or slightly lower offer. Considering he is not willing to counter and is paying in cash, I would figure he is not in any kind of a rush to buy a house.
If this was a regular buyer I would say your realtor would be right in countering however with it being a cash offer cashbuyers rule the roost, they have all options available to them unlike those needing mortgages. As long as you were okaywith the price the realtor should have advised you to accept. A cash buyer is basically going to call the shots. I lost out on a number of short sales to cash buyers even when I was say 30k-40k over their offer. People like cash.
What difference does it make if it's cash? Other than being able to close faster, the seller is still going to get the the full amount they are owed on the sale from the bank.
What difference does it make if it's cash? Other than being able to close faster, the seller is still going to get the the full amount they are owed on the sale from the bank.
It isn't just about the speed of closing, but more about the certainty of closing.
Cash takes some risk out of the equation.
Inviting a bank into real estate transactions means inviting a suspicious third party that is not a principal, with focus only on their own benefits, and giving them a voice whether or not the transaction is valid.
Just another spoon in the soup.
The benefit of removing banks from authority in the transaction is real enough to many sellers that they will place a premium on a cash offer.
What difference does it make if it's cash? Other than being able to close faster, the seller is still going to get the the full amount they are owed on the sale from the bank.
It usually makes a lot of difference. With a non-cash offer, the sale is contingent upon the purchaser receiving mortgage financing. That translates into the sale being contingent on an appraisal, too (and perhaps other related contingencies).
Knowing that, if you had an acceptable traditional offer of $100,000 and a second cash offer of $100,000, which would you choose?
I've found that cash offers can even beat out higher non-cash offers. Certainty of sale is a great incentive to those wishing to sell.
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