How to craft a winning counter offer in real estate

The process of selling a house can be a long one, and it doesn’t stop once buyers have submitted offers on your home. 

At this stage, sellers have three options:

1. Accept an offer as-is
2. Reject an offer and walk away
3. Counter an offer with suggested changes

Sellers who aren’t entirely satisfied with the bids on their home but don’t want to walk away may decide to counter with a deal that they’re happier with. If they choose to negotiate with buyers, the purchase price isn’t the only thing on the table — contingencies, closing dates, deposits, and the like are also powerful bargaining chips. 

What is a counter offer in real estate?

A counter offer is a response to a bid on a home. It’s a negotiating tactic that both buyers and sellers use to get the best deal and terms for their home sale or purchase. While both buyers and sellers can make a counter offer, the seller makes the first one.

For example, if a seller liked a buyer’s offer but thought the asking price was too low, they could counter the offer for a higher sale price. If the buyer wanted to pursue the deal but thought the new asking price was too high, they could respond to the seller’s counter offer with a counter offer of their own.

How does making a counter offer work?

Instead of rejecting a bid, sellers can suggest new terms in a counter offer. Typically, they will communicate their new offer through their listing agent. Once buyers receive a counter offer, they can also suggest changes in their own counter offer that their agent will communicate to the sellers’ agent.

Sellers and buyers can counter an offer to negotiate any of the following:

• Purchase price
• Earnest money deposit
• Contingencies
• Moving date
• Closing date
• Closing costs

Most counter offers also include an expiration date for the other party to respond by or the offer is voided. This ensures a timely resolution and prevents an extended back and forth. However, there is no limit to the number of times buyers and sellers can counter each other.

Tips for crafting a counter offer

Writing a counter offer can feel as much of an art as it is a business practice. Lean on the expertise of your agent and follow the advice below for help:

• Avoid making an emotional choice: Selling a home is an emotional process — it’s not just a house, it’s all the memories you’ve made there too. As you craft your counter offer, try to detach any emotions from it. Your house is a valuable asset, your counter offer should be focused on getting the most out of selling it.
• Know your bottom-line: Determine the minimum you need to get from the sale of your home before making any other decisions. This number will act as a baseline to help you determine what is worth moving forward on or walking away from.
• Don’t get tunnel vision on a price: The purchase price for your home is an important factor, but it’s not the only bargaining chip you have. You may be able to negotiate savings by offering fewer seller concessions.
• Everything is up for negotiation: Don’t underestimate the impact of closing and moving dates. These may be especially important if you’re in the process of purchasing another primary residence while selling your home. For example, if you sell your home before the move-in date for your new one, you may have to move twice, costing you as much as $5,000.

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Counter offer examples

To help contextualize what counter offers in real estate can look like, we broke down an example of a home on the market for $440,000 (the national median home price at the time of writing).

• The buyer initially offers $425,000 with a 2% earnest money deposit, closing in 45 days with a home sale contingency.
• The seller counters with a price of $430,000 and requests an earnest money deposit of 3%, while agreeing to the home sale contingency and closing timeline.
• The buyer accepts the counter offer, agreeing to $430,000 with a higher earnest money deposit.

In this scenario, the seller was willing to accept a slightly lower asking price and a home sale contingency in exchange for a higher earnest money deposit, which would protect the seller in the event that the sale falls through.

Can you withdraw your counter offer?

Yes. This is most common in a multiple-offer scenario where a seller is countering multiple bids at one time (note this is prohibited in some states; your local agent can tell you more). In this case, the seller doesn’t counter in writing, they do so verbally through their agent.

The seller’s agent will communicate to the potential buyers that there are multiple offers (and counters) from the start. After the seller has accepted an offer, their agent will communicate to the other potential buyers that their counter has been withdrawn. 

What if your counter offer is rejected?

If your counter offer is rejected, you have two options:

1. Counter again: If the offer you countered was close to what you wanted but you weren’t satisfied with it quite yet, you may choose to counter the counter offer again with better terms. There’s no guarantee that the other party will accept, so be wary of trying to have your cake and eat it, too. An extended back and forth may frustrate the other party and you may lose out on a deal you would have been happy with because they don’t want to work with you any more.
2. Walk away: Not all deals are meant to happen. If you receive a counter offer that’s too far away from what you’re able to accept, it may be best to reject it and move on. It’s customary to reject a counter offer in writing and to politely state why, although this doesn’t always happen — when there are numerous offers and counter offers on the table, things can slip through the cracks.

Learn how long it takes to sell a house.

How do you accept a counter offer?

When a buyer and seller come to an agreement, they accept a counter offer by signing a purchase agreement. The purchase agreement is a legally binding contract that will make the terms of the counter official. As most counters have a short deadline of one to three days, signing the purchase agreement as soon as possible is best to ensure that the offer doesn’t expire.