Everything buyers need to know about counteroffers
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You've found the home of your dreams and signed the agreement of sale. Now comes the nail-biting wait to see whether your offer will be accepted. The chances are that you've put in an offer slightly lower than the initial asking price and if this is the case, the seller needs to decide whether or not to accept your offer. If they decide that the amount you've offered isn't quite what they need, your property practitioner will likely come back to you with a counteroffer signed by the seller. Jawitz Properties gives you the breakdown on counteroffers so that you'll know what to expect in this situation.
Basic facts about counteroffers
The first thing to know about counteroffers is that like original offers, they're only valid if they are presented to you in writing. After your property practitioner has gone to the seller with your offer, they will come back to you and let you know if the seller has accepted your offer or if they have provided a counteroffer. If there's a counteroffer, you'll have some time to consider it, but it's important to remember that until an offer or counteroffer has been signed by both you and the seller, there is no legally binding agreement in place. Another buyer could potentially swoop in and sign a deal in the meanwhile.
What does a counteroffer specify?
The most common counteroffer is around the price. For example, if a property was put on the market for R2 295 000 and you have put in an offer of R2 150 000, the seller may come back to you through the property practitioner with a counteroffer of R2 200 000. A counteroffer could also stipulate that you put down a bigger deposit or that you alter one of the suspensive conditions laid out in the original agreement of sale.
The advantages of counteroffers
Although it can seem like they create a stressful time, counteroffers have benefits for both the buyer and seller. It forces both parties to meet each other halfway, which helps you both to feel like the deal is a favourable one. As the buyer, you might worry that your initial offer was too high if it was unconditionally accepted. And for the seller, of course, counteroffers provide a way for them to get the highest possible return on their investment.
Factors to consider during the negotiation process
If there are more homes for sale than there are buyers in a particular area, this is known as a buyer's market. In this scenario, the advantage is in your hands as the buyer, because the seller will be aware that they may struggle to get another offer. As a result, sellers are commonly willing to adjust their price to avoid losing out on the sale. On the other hand, if you're genuinely interested in a property, avoid providing an offer that's too low. A seller isn't obliged to counter your offer - they can choose to simply reject it off the bat.
The most important thing to remember about counteroffers
The deal is only sealed once both you and the seller have signed the same agreement of sale. Think carefully about any counteroffer you receive, but don't waste time. A counteroffer will typically come with an expiration date, which means that it must be accepted, rejected or countered back within a specific time frame. The seller will still be open to other offers while you consider the counteroffer, so if you have your heart set on a property, it's best to act as quickly as possible rather than waiting for the deadline to approach.
The Jawitz Properties team is widely experienced at assisting buyers and sellers during the negotiation stage and the signing of agreements of sale. For all the advice you need around signing on the dotted line, get in touch today.
Author: Jawitz Properties
