Imagine this scenario. You have found the perfect house. It has been sitting there for 60 days and still hasn’t sold. You think to yourself, the time is finally right. The seller’s are probably eager to see an offer and should be negotiable.
Know your limit to avoid buying on emotion
No way. It’s just not possible. Maybe the seller is not as motivated as we first thought.
What Is A Multiple Counter Offer?
A multiple counter lets you know the seller has received more than one offer and is making this multiple counter to two or more parties. The seller can also make different multiple counters to each of the parties involved. Typically what happens when you sign a counter offer, it means you have an agreement and can move into escrow. With a multiple counter, just because you agree to the terms, it doesn’t mean you have an agreement. The seller has to get back to you and resign the counter, notifying you of an acceptance.
Advantage Seller
In the golden days of real estate (circa 2007) a multiple counter offer was often used to eliminate the weaker buyers who typically had a lower down payment and maybe a less desirable credit score. There was a good chance the price would go up and an eager buyer might be willing to give up some contingencies or reduce their inspection times. But does it still mean that today?
With fewer qualified buyers, is a multiple counter offer still an effective strategy? Plus, as a buyer, how do you know there are actually more than one offer on the same property? The real answer is you don’t. The seller’s agent does not have to produce any evidence proving more than one offer.
So, what you are saying is the seller’s agent could possible be unethical in an attempt to make the prospective buyer bid up the price of the house and accept the sellers counter? No, I did not say that, I believe that is what you inferred from the material I presented.
The way to make you want something or desire it even more is to let you know that someone else also wants it. We learned this when we were kids.
Recently we were involved in a situation where the seller’s agent notified us they were making a multiple counter offer to our buyer. They countered back $5000 less than the asking price. Our buyer chose not to respond but to walk away. 45 days later they brought the price of the house down by $50,000. Was there more than one offer? We may never know.
What To Do?
When you make an offer on a house, you should set a limit as to the maximum price you will be willing to pay. Try and be realistic before you have an opportunity to become emotional. Determine the market price of the house when you make the offer and know the approximate cost of the repairs or changes you are going to make so you don’t blow your budget. Also, don’t place a higher value on the intangibles or on the amenities that are harder to quantify such as a view. It could be worth $25,000 to you but maybe $50,000 to someone else.
By thinking of these issues in advance, you may save yourself some money.
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