Best and Final Counter Offers
What is a "best and final" counteroffer? It’s the counteroffer that can strike fear in even the most seasoned buyers. So how are you supposed to respond when there's not even a price? A counteroffer usually states something like buyer to pay best and final price or buyer to pay highest and best, and then it is your job to pick the number. There are a few strategies that will help you do just that.
#1 Decide what the maximum is that you would pay for the house? What's your number? You have to forget about what the other buyers might do because guess what? We can't read minds. Nobody knows what the other buyers are going to do. So you have to decide what is the most you are willing to pay. Your realtor may ask, or you ask yourself if you're willing to offer X. The house sells for five thousand dollars more than that. Will you be OK with that outcome? And if the answer is no, then maybe you need to adjust your price up another five thousand dollars and then ask yourself again until you get to a point where you say, I don't care if it sells for a nickel more, they can have it. I'm done. That's how you know; you’re at your absolute max. Now, not every house might be worthy of that. Some homes are “must-haves” those you are willing to go to the mat for.
#2 Another strategy is called an escalation clause. These are a little controversial, and I highly suggest your realtor asks the listing agent how they feel about it. It works like this: let's say the house is listed for $800,000, and you're going to offer an escalation clause of $900,000. The clause could state that the buyer will pay $5,000 over the next highest offer with a maximum of $900,000. That's an escalation clause. It must have a cap; it must have increments. And it's not always welcome by the listing agent and seller. So make sure they're OK with it. If you have any questions about counteroffers or how to respond and negotiate, give us a call. We're here to help.