Real Estate Information Article - Understanding Counter Offers Can Have Its Benefits authored by Daniel Cobb Information for real property owners, buyers, sellers, investors, realtors, brokers and contractors

Real Estate Brokers And Agents a national directory of real estate brokers and agents. The following article Understanding Counter Offers Can Have Its Benefits was authored by Daniel Cobb and is republished in this directory with the author's permission. These articles are published as an information source for real property owners, buyers, sellers, investors, realtors, brokers and contractors. We do not claim, assume, or accept any responsibility or liability for the information provided in these articles or for the services or products provided by the people or companies linked to in these articles. Understanding Counter Offers Can Have Its Benefits By: Daniel Cobb Learn how to use counter offers to make quicker and more favorable real estate deals. The counter offer is a vital part in the negotiating process of purchasing real estate. It can often determine if you get a good deal or a less favorable one. Ironically, most people (including most real estate professionals) never really have or use a strategy that makes counter offers work in their favor. When dealing with counter offers the number one mistake most people make is not having a method to determine each counter offer's anticipated purchase price. The problem is that when finding an anticipated purchase price for the next counter offer most people tend to just take the amount that is in the middle of the last two offers on the table (see table 1 below). Table 1 Original asking price Buyer's offer Seller's counter offer $100,000 $90,000 $95,000 A much more effective way of choosing a counter offer's anticipated purchase price is to start with a predetermined group of percentages that decrease in value. For example: 55%, 40%, and 25%. Then when it is time to make a counter offer use the group of percentages to determine the counter offer's anticipated purchase price. In this example: the first counter offer would be 55% of the in-between amount of the first two offers on the table, the second counter offer would be 40% of the in-between amount of the last two offers on the table, and the third counter offer would be 25% of the in-between amount of the last two offers on the table. When dealing with counter offers using this technique will benefit whoever uses it (buyer or seller) in several ways: It will let the other party involved in the transaction (buyer or seller) know that the final offer is close to being made. It will help to make the negotiating process quicker by creating fewer counter offers. It will help increase the chances of an offer being accepted because the other party involved (buyer or seller) will anticipate the final offer being reached. It is important to remember that the percentages used in this technique can vary per individual person or deal. There is no strict formula for this technique except that you counter with a preset percentage of the in-between amount of the last two offers on the table and decrease the percentage used in the formula with each consecutive counter offer made. Lastly, it is important to remember that the asking price is not the only thing that is negotiable in real estate transactions and that other elements of the contract such as down payment amount, closing terms, etc. can be used to help leverage the negotiation of the asking price. About the Author Daniel Cobb lives in Chicago, Illinois and is a former realtor who is now a real estate investor. He is also author of the e-book, "Complete Guide To Investing In Real Estate Through Government Scavenger Sales" - an informative e-book on how to purchase real estate through government auctions. This article was posted on June 19, 2003 For more real estate information and articles see Real Estate Brokers And Agents - Articles or to search for a broker or agent in your area see Real Estate Brokers And Agents. The opinions, statements and information contained and expressed in the foregoing article are solely those of the author. No position for or against, agreeing with or disagreeing with anything contained in said article is taken by Real Estate Brokers And Agents.com We do not assume or accept any liability for the use of the information contained herein. This article is published solely as an information source. Anyone who does not accept this disclaimer is not authorised to read or use this article in any way. ©Copyright 2005 Real Estate Brokers And Agents, a national directory of real estate brokers and agents. All Rights Reserved Worldwide. submit articles   real estate brokers and agents directory home   contact us