Offer and Counteroffer: The Two Types of Counters
The seller has only two realistic choices in a counteroffer:
- Highball. The seller rejects the buyer’s offer and comes back almost to the asking price. The seller’s motivation here is simply to keep the negotiations open in the hope that the buyer will eventually “come around.”
- Compromise. The seller counters with somewhere in between the asking price and the buyer’s offer. The seller is hoping that negotiations will eventually result in an acceptable price.
To my mind, there’s little point in the seller’s countering a buyer’s “close to asking” offer. Better to simply accept it than run the risk that the buyer will simply walk away in a huff. On the other hand, some hard- nosed sellers will simply counter such an offer by writing in the exact asking price and terms. Sometimes they win and get a deal. But sometimes the buyer gets offended and walks.
Beware of an agent who comes back after presenting your offer (or counteroffer) and says something like, “We have a deal, congratulations. Oh, by the way, the other party made a few minor changes and I’ll come by and have you initial them.” That’s incorrect. Any changes at all mean the offer (or counter) was rejected.
You now no longer have any obligation to the deal. When the agent comes by for countersigning, what’s really being presented to you is a totally new counteroffer.
The Bottom Line
My best advice in offering and countcroffering is, “Always strive to keep the negotiations open until you succeed, or simply give up.” I’ve countered what I thought were hopeless offers only to have the other party rethink its position and come back with something more realistic.