For agents who have seen just about everything, there is one more scenario that could arise that actually isn’t unheard of – a seller giving a counteroffer over the asking price.
In seller’s markets, it’s expected that a seller will write a counter offer at list price or higher. In this scenario, the seller believes that if one buyer won’t come up in price or exceed it, there are other buyers who will agree to pay full price or better.
While it may be a calculated risk, David Welch, a Realtor in Winter Park, Fla., told Realtor.com that it is something that could happen.
“Absolutely, the seller can counter your offer above the listing price,” he explained. “Whether or not the property will appraise is a different question.”
With that scenario, it could prove to be hard to find the right price for a home and it also could impact the chances of the buyer getting financed. Without all-cash offers, sellers want to get the most they can for their property without going too high for the appraiser, making it impossible for buyers to get their loan approved.
Sellers could raise a counteroffer to cover closing costs if the seller wants to fold them into the home’s price. Usually, this signals that the seller isn’t willing to pay the cost of closing but will add it to the cost of the mortgage to that it is rolled into the loan.
According to Joan Flood, a Realtor in Cape May, N,J., this can lead to some additional complications.
“If you do not need the cash to close, I would not recommend it,” she said. “The house must appraise at the higher amount or you won’t be able to get your loan.”
Sellers who receive multiple offers also may raise the price in the counteroffer. These clients may believe that the initial asking price was too low and with interest from multiple potential buyers, they see an opportunity to ask for a new, higher price.
As a buyer’s agent, it is up to you to guide your clients to determine whether to accept the seller’s counteroffer or counter back with a number they feel more comfortable with. That figure can be above or below the original asking price.
As agents, it is important to recognize instances where a seller may not see your buyer client’s offer. Conversely, in some transactions as a seller’s agent, they may not wish to see certain offers, according to Phil Lunnon, a Realtor in Lakewood, CO.
“If the seller has specifically instructed the agent not to bring offers that do not meet a certain minimum requirement, the agent may not need to present any offer that falls short of the minimum,” he said.