The Art of the Counter-Offer - Part 2

The Denninger Report  - by Gini Denninger

There are cases where a buyer is unrealistic on price. Most agents have been out with such buyers, especially in the last few years. They have taken the term “buyers market” firmly to heart. Often these buyers consider themselves experts in real estate, when generally they’re not. They may have been paying attention to home sales and market trends, but too often neglect the nuances agents must understand and consider when conducting a price analysis. They may refuse to use their agent’s comparative market analysis (CMA) of the home when putting in an offer. In these cases, the offer made is typically well underpriced and is usually followed by: “If they don’t like the price they will counter-offer”. Umm, no, not always.

Home selling and buying has its own unique psychology. Sellers are attached to their homes and while some may over estimate the value of their home, most understand its real value. When an offer comes in that grossly undercuts that perceived value the first response the seller has is often anger, followed by feeling insulted and then feelings of distrust of the buyer, buyers agent and sometimes their own selling agent. If too low, an adversarial atmosphere is developed, making a successful conclusion to the sale difficult and sometimes impossible. In these cases, most sellers refuse to respond to the offer. Their agent will get back to the buying agent and tell them such, only to hear: “Well, have the seller counter.” If the seller refuses, a good buying agent will try again, to educate their buyers and suggest re-submitting a more realistic offer. If they do that, the sellers may forgive the “faux pas” on the part of the buyer to get the deal done.

When dissecting these situations, usually what happened was that the buyer decided to toss a low-ball offer out, in hopes it would be accepted, so that they would be the “winning party” in the deal. This buyer fully believes that the seller (in a buyer’s market) is so desperate to sell they will accept almost any offer, or will counter-offer at a price point that would be much lower than the original asking price. But the reality is that such desperate sellers are rare in our regional market. So the actual outcome is usually no counter-offer, no deal.



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