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Offers, Counter Offers, and Multiple Counter Offers

April 9, 2010 | By Kelley Koehler | Filed Under Home Buying, Purchase Contract 

Things are definitely picking up.  I compiled the raw data for my Tucson market reports last night and there’s a huge increase in sales in March.  More activity means a higher probability that we’ll run into more counter offers… and multiple counter offers.

So let’s review how each works.

Usually, negotiations start when a buyer writes an offer.  The Seller has 3 options – accept it, reject it, or counter it.  If they write a counter offer, it goes back to the buyer.  And the buyer has the same 3 options – accept it, reject it, or counter it.  And that goes back and forth until someone either accepts the counter offer, or until someone rejects it.

With regular counter offers, there’s only one buyer and one seller negotiating for the house.

Multiple counter offers are different.  By definition, multiple counter offers involve multiple potential buyers at the same time.

Let’s say you like a house and submit an offer.  Two hours later, the listing agent calls and says they’ve received a second offer on the house from another buyer.  So the seller now has 2 offers in front of them.  And THAT gives the Seller a lot of options.

The seller can accept one and reject the other.  The seller can counter only one of the offers – which brings up some interesting dynamics regarding timelines for the buyer that didn’t receive a counter offer.  If the seller response time is long enough, potentially the seller can counter one buyer, try to get them higher, while keeping the second offer in reserve.

But sometimes the Seller wants to give counter offers to both buyers.  And they make a multiple counter offer to each buyer. 

The multiple counter offer is unique in that the seller produces this counter offer AND they have the final word on which they’ll accept.  A multiple counter offer goes out to more than one buyer, each buyer gets to consider the terms and accept or change them again.  All the buyer responses all go back to the seller and the seller gets to pick which one he wants to take.

The multiple counter offer made to each buyer doesn’t have to be the same.  The seller could propose different terms and price to each buyer.  And each buyer can accept, counter, or reject that multiple counter offer.

Things get more complex, and fast, when there’s more than one offer involved.  Be sure you know your timelines and clearly discuss your negotiating strategy with your agent!

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