I will be giving you several posts guiding you toward successful counter offers – that is, counter offers that preserve your profit margin while closing the deal! This post is my brief overview of the basics of counter offers. What are some of the complexities you should understand?

You may find negotiating counter offers to be annoying if you feel you did a great job on the rehab and your asking price is fair. But almost every homebuyer believes they should try to buy for less than the asking price, unless it is an unusual market! You would probably do the same if you were buying your own top-of-market residence. Counter offers on your sale properties are the final critical negotiation locking in your profit on this fix & flip property.

For simplicity of terms, a buyer’s new or revised offer is always a counter offer, because the first offer from the buyer counters your asking price. Buyer and seller trade counter offers back and forth until they come to an agreement, or until one walks away.

Some counter offer fundamentals …

• You and the buyer are countering (negotiating) both the price and everything else that is included in the deal. Closing costs – appliances – home warranty – a change in the closing date – anything that is part of the deal must be listed with the counter offer and included in the eventual contract. You can counter with the same price but with changes in the other terms and items, as can the buyer.  I’ll have more comments on the risks and rewards of this strategy in future posts.

• Market forces mean that one party will have the upper hand with counter offers. In a sellers’ market your buyer will have less to choose from, and you can stay closer to your target price and terms. But a buyers’ market may mean you need to be flexible about the terms to sell sooner rather than later.

• Your buyer may believe that through countering they are seeking the “perfect price” – but you should never, ever forget that this decision is an emotional one – on both sides, really. Negotiation through counter offers is a psychological game wherein you want the other party to feel happily that they won, while you feel the same. More about this in future posts!

• If you don’t want to counter away from your last offered price, at any point you can refuse to counter a hopeful buyer’s last offer. This lets the buyer know that they can buy it at your last counter offer price and terms, or not do the deal at all. The buyer can also do the same in response to your counter. However, refusing to counter is a risk of losing the deal if the other side has already decided they won’t agree to the last offer.

Read more about the art of counter offers in my post, and in future posts here.

When you are a seller in a buyer’s market, what’s your approach to buyer’s counter offers?

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