Posted January 24, 2022 in Real Estate Trends
Last month, I discussed what “pending” means, and what needs to happen for a home to go Pending. Let’s look at what happens when there is a counteroffer involved.
To recap, the offer (and all terms) must be signed and AGREED to by both the Buyer and the Seller. Once received by the sellers, there are 3 responses they can make:
a) accept the offer
b) counter the offer
c) decline/ignore the offer, or let the offer expire. The seller does not have to respond to an offer.
An offer to purchase puts the ball in the sellers court. In our current sellers market, there is a very high chance that the home will have multiple offers from interested buyers. The sellers Realtor may contact a buyers Realtor about some items in an offer that the sellers are considering countering. If the seller chooses to counter a buyers offer, it must be in writing to be a legitimate counteroffer. A counteroffer is a NEW offer from the seller to the buyer.
The ball is now in the buyers court, and they can choose to either:
A) Accept the sellers counter offer
B) Counter the sellers counter offer
C) Decline/ignore/let expire the sellers counter offer
If the buyer accepts the counteroffer, buyers sign &/or initial the counteroffer, and we move to the next step. The buyers Realtor emails the mutually accepted offer (purchase/sale agreement) to sellers Realtor and we go Pending.
During the counteroffer steps, this home is still on the market, can be shown, and can still receive other offers. A current offer can change their offer & terms. If the seller chooses to go with a different offer, they can. All that is needed is an addendum signed by the seller withdrawing the counteroffer that was sent over to the buyers Realtor, and now a different buyer is now in the first position. In Real Estate, time is of the essence. Realtors have a saying, “If you sleep on it, you may never sleep IN it.”
One of my listings received an offer and my client countered the buyers offer. While we were waiting on the buyer to respond to our counteroffer, we received a better offer. My seller client chose to sign a “counteroffer withdrawal” and send it to the buyers Realtor. Then we accepted the other offer. I received a call from Buyer #1’s Realtor, and she was upset for her clients. I understand where she was at, but you can’t put homes on layaway while you ‘think about it’. Someone else isn’t thinking on it. Until an offer is mutually agreed to and signed around by both parties, and BOTH Realtors have received a copy of the mutually agreed to, and signed around purchase/sale agreement (aka offer) then that home is NOT PENDING SALE.
What if buyer chooses option B, and chooses to counteroffer the counteroffer? A counteroffer to the counteroffer is, again, a NEW offer to the sellers this time. A counteroffer is always a NEW offer. It is not a continuation of the offer. Sellers now have options A-C again. The home is still available for other buyers, and yes, other offers.
Another one of my listings received a couple of offers, and we countered one of those offers. We then received another great offer, but before my seller had a chance to do anything, the offer we countered accepted our counteroffer, and emailed me the buyer signed counteroffer. Once the buyers Realtor sent this to me, we now had a signed around, mutually agreed upon Purchase/sale agreement (the offer), and we are Pending. Once a home is Pending, the other offers don’t matter as we are in contract, and another offer cannot be accepted unless the current contract is broken, or rescinded. The other offer can go in a ‘back up position’ in case the current contract fails, and then the ‘back up’ offer can move into first position…. but that is a different article altogether!
Remember that verbal means nothing, and time is of the essence. If you are in a counteroffer situation, don’t dillydally or you could be passed up.
As always, may the odds be in your favor. I am here for any questions, always available to help you with your next Home Adventure. Whether you are buying or selling, I got you!