Real Estate Offers & Counteroffers: Presentation & Negotiation

Instructor: Tara Schofield

Tara has a PhD in Marketing & Management

Being an effective agent requires sharing information in a neutral, direct way and letting your clients consider offers for themselves. Learn about offers and how to present them to your clients.

Neutrality

In a typical real estate agent relationship, you, the agent, are the advisor to clients. However, it is important to be able to share information with your clients in a neutral way, allowing them to consider an offer without having their opinions swayed by your statements.

Let's imagine you are representing sellers, Chuck and Paula, who are hoping to get their full asking price for their house. They've told you they don't want to negotiate on price and want their home sold as quickly as possible. You immediately go to work to market their home.

Content of Real Estate Offers

To help your clients understand the offer, you go over some key definitions before giving specifics, helping them understand what each part of the offer means before they are overwhelmed by the details.

  • Offer price is the amount the buyer is willing to pay for the home.
  • Closing date is an estimate of when the buyer wants to purchase the home.
  • Terms refer to the financial elements of how the buyer will pay for the home.
  • Contingencies are any requirements or factors that could potentially cancel the sale.
  • Expiration period is when the offer expires if the seller does not accept the offer prior to the stated day and time.

You receive an offer from a potential buyer who loved the home. You have personal doubts that Chuck and Paula will consider the offer because it doesn't meet the requirements they gave you previously.

When you present the offer to Chuck and Paula, you are careful to present facts without altering your voice to indicate a personal opinion. You also avoid giving feedback until your clients can consider the offer on their own.

The buyer has offered $25,000 less than the asking price. They want to complete the sale in 30 days, giving them time to secure a mortgage from their bank. The only contingencies they ask for is a professional inspection and appraisal.

The buyers give Chuck and Paula 24 hours to consider the offer. Because the offer is in writing, you are required to present the offer to Chuck and Paula, even though you're relatively certain they will reject the offer price.

Counteroffers

Chuck and Paula seem disappointed in the offer, stating they didn't want to drop the price by more than $10,000. You ask how they feel about the other elements of the offer. They have no problem with anything else, just the proposed sales price.

You give your clients different possible scenarios, remaining neutral as to not sway their opinions. You explain they can accept the offer, reject the offer, or counter the offer.

A counteroffer is an attempt to negotiate a sale by offering a different price than was offered by the potential buyer. A counteroffer can extend to other elements of the offer beyond the offer price.

For instance, if Chuck and Paula were willing to sell for $25,000 less than asking price but wanted to close in 15 days, they could counteroffer the proposed closing date or change any other part of the offer. After a counteroffer is prepared and sent over to the buyer's agent, the offer is binding if the buyer accepts it. Therefore, your clients must be ready to honor the counteroffer once it is made.

When a counteroffer is received, it can be accepted, rejected, or countered again. Your sellers may submit a counteroffer that the buyer doesn't like and the buyer may walk away from the house.

To unlock this lesson you must be a Study.com Member.
Create your account

Register to view this lesson

Are you a student or a teacher?

Unlock Your Education

See for yourself why 30 million people use Study.com

Become a Study.com member and start learning now.
Become a Member  Back
What teachers are saying about Study.com
Try it risk-free for 30 days

Earning College Credit

Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it risk-free for 30 days!
Create an account
Support