When Should You Respond with a Counteroffer?

 



Link to the Video I mentioned about counter offers and listing your house too high 04/us-faces-4-million-home-shortage-santa.html



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 When Should You Respond with a Counteroffer?

Introduction to Counter Offers
 Counteroffers are in the air. They've always been part of wrapping up and tightening up a contract. There are some things you have to know. If a counteroffer comes in or if you're selling a house and you respond to an offer and counteroffer, there are some tactics we use to make sure you get the best deal.

Using it as a strategy to make sure you get what you need when you sell your home, or if you're buying a home. And sometimes when you're buying a home in a seller's market, you don't get.

Anything you want, like price terms, when you can move in, repairs, those kinds of things. And that's the build out of a counter offer because the way the offer is shaped up, it's price, its inspections, contingencies, when the seller's gonna move out, meaning when you can move in and all the associated costs involved.

Home warranty, escrow transfer fees, all these other things, they're all tied up in an offer, and an agent that's been doing it for 22 years really knows what to look for in the 16-page offer to point it out so that when we go back to strengthen. That offer by saying this is really what we want. 

And it could be price, it could be move out, it could be repairs, it could be your title company, it could be several things. It could be anything you really want now. 

Understanding the Counteroffer Process

So the way it works is offer is presented, and if the seller accepts it, then you're in contract, you're in escrow. If it's not everything you want, the seller will counter it and say, wWeaccept this offer subject to this counteroffer, which then goes into,whatever the terms they need, ; need to move out on August 15th.

And then it has to be very specific, who's going to pay for the PITI or the monthly mortgage after the close. It's a lot of going back and forth, and sometimes you just have to make sure that everybody's in agreement before you move forward. 

Tactics for Handling Low-Ball Offers

Now, tactically, what happens if your house is on the market?

I don't know. 37 days and you originally had a price at 1.89 and now it's down to 1.699, and it's still not coming in, and then you get a low-ball offer. What are you gonna do? You got one offer. So one in the hand is better than two in the bush, what are you gonna do? And I'll present that to you, saying, I would just accept it or maybe tighten up a coupleof  little things.

But the price is the price because, at the end of the day, the sellers don't determine the price; the buyers do. And there's a pool of buyers out there, and once they've gone through your house and determined that it's too high for the condition, location, and market conditions, meaning comps,
They'ree passing you on. And if it's on the market for 37 days, that means you're overpriced based on those things. And when you get a low-ball offer, that's one buyer willing to do it. It is your side to decide if that's what you want or not. And yes, you have the right to counter it.

Negotiation Strategies

Now, when you counter an offer, the buyer can respond in one of three ways. Yes, no, or let's meet in the middle. That's where negotiation comes in, and with that, if it came back, let's say you start at 1.89 and it went down to 1.7, and then you got a 1.6 offer, meaning you're $300,000 away from your original list price. That's what the buyer's willing to pay. And then you say no, I'm not gonna. Walk away from my property for 1.6. I know it's worth 1.8, 1.9, which, in your mind, is where ego and hubris come together.

That's where 99% of the houses that don't sell, it's because of ego, seller ego. They think their house is worth more than what it really is. And again, sellers don't determine the price ;buyers do.

Dealing with Overpriced Listings
When you overprice it. You hurt yourself, your house sits on market for a long time, you lower the price, and then one buyer comes in with a low ball offer, then you get pissed off at your agent because they're not doing their job. You see the problem here?

The best way to make sure that you get everything you want is to move out on August 16th. I want, as is sale. I want no repairs. 

Maximizing Buyer Interest

Attract as many buyers. Get as many offers as you can.. 'cause anything more than two, you're in the driver's seat.

Now you can go back and negotiat.e I have five offers in hand. This is mt best price. I can go back as a listing agent and negotiate with the other buyers and say, Can you match it? Can you beat it? 

Case Study: Overpricing Pitfalls

And that's how we negotiated yesterda.y I talked about this house that's been on the market for 37 days. The original list price is 1.9. It's down to 1.6 and it's still on the market. The problem is I have two of the same model coming up, and this person's sticking around with price ego. My house is worth this much money.

If you remember looking at it, you can go back to it tomorrow and take a look. I'll put that link in today's blog. It was an updated kitchen, but the bathrooms were meh, and it was on a T intersection, and it's just not super desirable, and it's on a busy street. When you overprice a house, all you're doing is hurting yourself. And you say I can wait for the right buyer to come along. All that is gonna do is hurt you, and then you're gonna get frustrated and desperate.

And then you have desperation, breath, and that just hurts the deal. That hurts you ultimately. So if you listen to your agent and get the offer done, you get your price listed low, attract as many buyers. The buyers know they will look at the CMAs. The comparable market analysis and say, I know this house is listed at 1.6, but it's really worth 1.75.

I'd better get it around 1.75 if I wanna be competitive. They write an offer of 1.75. If you looked at 1.9 thinking, Oh, my house is so much better. Because you're ignoring the fact that you're on a busy street and you haven't updated the carpets or the bathrooms, your house is going to sit because they're not gonna look just at your house. They're gonna look at 50 other houses and look at five to 10 and make a decision. I'm gonna buy that house instead of this one, 'cause this one's overpriced. So, how do you do this if you have only one offer?

You gotta be careful. I wouldn't really worry about price. I would understand that I made a mistake. And forcing my agent to list it high and say that I was willing to wait for the right buyer to come along. You can counter the asking price. You can counter the condition, you can counter the inspections, you can counter repairs, you can encounter all these different things, but is it a good idea?

Are you willing to walk away from that deal as it's presented? Buyers know they have choices now, even though it's a seller's market. If they're looking at a house that's on the market for 37 days, they're gonna throw in a FU offer and say, Hey, take it or leave it. And if you come back with a counteroffer, they might walk.

Conclusion and Final Thoughts

This is the conversation I have with sellers when they overprice their houses. It's frustrating to see ego and hubris destroy options and opportunities for you to do the thing you want because you think your house is worth more than what buyers are willing to pay. Are counteroffers a good idea? Yes. If you have five or six or seven offers, you're in the driver's seat. But if you only have one offer, 'cause you overpriced it, I would say just take the offer or. Don't accept it at all and be done with it, but then you're wasting this time of the agent and that's pretty sad.

It's pretty pathetic. Enough of that. 

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Current Market Rates and Listings

Mortgage Rates this week 

Rates are down a little bit from last week, down to 6.88 for a jumbo and. If you're 30 years old, VA is 6.17, so there you go. It's coming down a little bit, but it's not at six yet. You can absolutely buy it down to six-ish with points. Talk to your lender if you don't have a lender.

I have three great guys that I can send you to. That's what you get for a million dollars in San Jose. 


What you get for $1MM in SILICON VALLEY 
Local Listings and Market Trends
Santa Clara County Home Gate Drive, $1,050,000, not my listing. Three bedroom, two and a half bath, 1300 square feet. Built in 1984, it is right by CU Lake, Cunningham Park, off of Ocala and Capital Expressway.

This is a really good area, but it has an HOA, and you know how I feel about HOAs. Let's take a look. Quick look inside, I think. This one's gonna sell pretty quick. Let's see how long it's been on the market. 55 days. This is a pick-me-up. Oh, that's why. Look at the original of everything. Remember you overpriced stuff and will sit 55 days right there.

I'm glad that they did the floor plan. Thank you to whoever this listing agent is. Yeah, I'm not happy about the paint, but I can look past the paint. Some buyers can't. What I would suggest is that your kitchen is original. If you're asking a premium for a house with an original kitchen and bathroom, your house is gonna sit. 

It doesn't matter. The floor plan doesn't matter, the location does. If it's overpriced, it's gonna sit 55 daysLet'sst break this open here for you, so you can see what I'm talking about. This is in our neighborhood. 

What you get for $2MM Santa Clara County 
This is a brand new listed Swiss Drive, not my listing, $2 million, five bedroom, three bath, 2,500 square feet, built in 1966, and is on the Santa Teresa high school side, which means that you're gonna have noisy weekends, football games, et cetera. But that's okay. It'll still sell because Swiss Drive is a bus, street. Maybe 2 million is too much for this one, but we'll keep an eye on it.

Let's take a look inside real quick. That's a pretty nice view of the foothills. See right there, there's a little creek, and then right behind it. Existing home sales, we're doing the 12 Bay Area months of inventory chart, and just so you can see where we are, everything seems to be going down in the downward spiral, even though this is, I believe, Napa.
Yeah, it's Napa, it's even coming down. So we're right at the tail end of the, we're in the middle of the selling season, so we're seeing volume pickup rates are going down, so we're gonna see more consumption. Everything here, except for Sam Martin, is below the six-month mark. It's below four months, really.

Sam Martin only has seven homes for sale right now. Maybe there's just some price adjustments that need to happen there. 

Final Remarks

Have a great weekend. Thanks for watching. Vito with Abano, we'll see you out there. 


🔴 Video Living in San Jose in the No. 4 spot. in US | What you get for $1MM in SILICON VALLEY https://youtu.be/hxw5k739OKU?t=521

Vito Scarnecchia

Real Estate Broker, Veteran, Dad

DRE#: 01407676

408-705-6817

Vito@abitano.com

Update your home value: https://hmbt.co/bT7qRJ      

FREE DESKTOP APPRAISAL https://www.propertyrate.com/agent/vitoscarnecchia

If you are moving ANYWHERE in the world - Let me know! I know a LOT of AMAZING Agents!





🔴 Willow Glen's five most expensive homes https://youtu.be/3A_E2ck0ePg




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