Counteroffer forms aren’t very complicated to prepare. They are often short because they are used to fine-tune the terms and conditions of offers received from prospective buyers.
When going over the buyers' offer check that everything is OK. If it is fine with you, except for one small point, don't rewrite the entire offer. Instead, give the buyers a counteroffer stating that you will accept all their terms and conditions except that you want $200,000 for your house, and you need six weeks after the offer is accepted to close escrow.
That way the ball would be back in the buyers' court. They would then review your counteroffer and decide that a six-week close of escrow is okay, but they won't pay more than $195,000. That’s when they send you a counter counteroffer to that effect. If you agree, you sign it, and the deal’s done.
Define a Timeframe with Counteroffers
A loan contingency may state that the buyers have 30 days after the offer is accepted to get a mortgage approved. If the prospective buyers can't get a loan within 30 days, you have the choice of either giving them a few more days to get financing or putting the house back on the market. Either way, you are in control of the situation.
Good contingencies always have timeframes where buyers must complete a specified action or cancel the contract defined. We advise that you never accept a contingency that’s open ended. When setting timeframes, be firm but realistic. The faster you close the deal, the better. It is important to remember that you don't want your house off the market any longer than is necessary.
Obtaining Back-Up Offers
You would be wise to protect yourself by seeking a back-up offer if you suspect that the deal on your house may fall through for any reason. One situation in particular that requires a back-up offer is any contract that contains a "subject to sale of buyer's property" contingency. A back-up offer is also advisable if you and the buyer can’t agree on some negotiable provision of the contract or if the buyer is obviously struggling to qualify for a mortgage to buy the property.
A good back-up offer states that you have already accepted another offer on your property. It also stipulates that the back-up offer will not take effect until you give the back-up buyers formal written notice that the previous contract has been canceled. Therefore, the back-up offer will only take place if the contract with the buyer in first position is canceled.
Be aware that motivated buyers generally don't stay in back-up position for very long. They keep looking at other properties after signing your back-up offer. As soon as something better comes on the market while you have them on hold, they could take it. Back-up buyers can usually cancel a back-up offer anytime they want, until you advise them that the offer in first position has been canceled.
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