When Should You Use a Counter Offer in Real Estate?

Real estate transactions are rarely simple, even when buyers see eye to eye. This is through no lack of trying on our part! As real estate agents, we use our expertise and an industry-spanning system to try to keep things as straightforward as possible. But when approaching the escrow process, there are often a few more details that need to be ironed out. This is where counter offers come into play. But when do you use a multiple counter offer? What even is a multiple counter offer? We’re here to clarify these questions and more in today’s blog.

Real Estate Counter Offer Examples

In real estate, a counter offer is employed following a buyer’s bid on a home. Once a bid is received, the seller has three options:

  • Accept the offer
  • Reject the offer
  • Counter the offer with an alternative offer
Photo credit: Envato

Those first two are pretty intuitive, but what about that last one? An offer can be countered in a series of ways. Perhaps the seller wants a shorter contingency period. Maybe the buyer wants a shorter close of escrow date. Maybe they want certain furnishings to be included in the sale. Any of these factors (and many more) can warrant a counter offer. The most commonly used real estate counter offer examples are:

  • Seller Multiple Counter Offer
  • Seller Single Counter Offer
  • Buyer Counter Offer

When to Use a Single Counter Offers vs. Multiple Counter Offer

What sets apart a single counter offer and multiple counter offer is simply the number of offers being countered. Pretty straightforward, right? But be careful not to confuse this with the total number of offers received. That’s because you may not be intending to counter every offer.

Say, for example, you’ve received five offers, but the seller only wants to counter one of these offers. In this case, you’d use a single counter offer. 

Now, in another example, let’s say you’ve received five offers, but the seller wants to counter three of these. This would warrant a multiple counter offer.  

You Can’t Counter What You Haven’t Received

However, in order to take advantage of a multiple counter offer, you must have already received the offers you wish to counter. You cannot file a multiple counter offer to include a counter on an offer you are only expecting to receive. 

Photo credit: Envato

Case in point: a realtor gives you a heads up on an offer that’s coming your way by the end of the day. You must wait until you have officially received that offer to include it in your multiple counter offer. 

So what if you already have one offer you’d like to counter and a second on the way, but don’t want to wait? Then you need to use a single counter offer instead of a multiple counter offer. 

Highlights of the Seller Multiple Counter Offer Form 

Completing your form for a counter offer real estate professionals in California will accept is pretty intuitive.The California Association of Realtors (C.A.R.) provides a sample Seller Multiple Counter Offer form that we’ll reference. You can begin by filling in the date in the field that reads “dated.” This shouldn’t be today’s date but rather the offer’s date. By contrast, the date field in the upper right corner will be the date that you are preparing your counter offer. 

Any terms that you are going to be countering need to be specified in the relevant “Terms” section. You have space to write out the specifics in the “Other Terms” field. 

The form also gives you the option of attaching additional documents. In this case, you’ll need to complete section D, checking off the relevant fields and specifying the documents.  

The Seller Multiple Counter Offer form conveniently allows you to place an expiration date or time for the buyer’s response. If you opt to disregard this section, then the buyer will automatically have a standard three days to respond following the issuance of the counter offer. 

Following the Issuance

Once the seller has signed the completed Seller Multiple Counter Offer form, it can be issued to the buyer. If the buyer accepts the counter offer, they will sign the document as well. However, if they instead wish to issue their own Buyer Counter Offer, they’ll need to check the appropriate box. This incorporates their counter offer into the agreement. 

Photo credit: Envato

If the seller wants to accept this specific offer with no follow up counter, they will then sign Section 8. This section also indicates that the buyer accepts all terms with no counter offer of their own. Signing section 8 stands as a binding contract between both the buyer and the seller. At this point, the Seller Multiple Counter Offer has served its purpose. 

Highlights of the Seller Single Counter Offer Form

By contrast, the Seller Counter Offer form provided by C.A.R. accommodates a single counter to a single offer. This form mirrors the Seller Multiple Counter Offer form in several ways. Dates, the terms being countered, additional forms, and expiration dates will all be handled in the same manner. 

The seller would sign the document before issuing it to the buyer. The buyer then has the opportunity to sign the document, making it a binding contract. However, if the buyer wishes to issue a counter offer of their own, they will need to check the respective box. 

You always want to be extra careful when filling out counter offer forms. However, the Seller Counter Offer form deserves extra caution since a signature renders it a legally binding contract. As soon as the buyer signs the form, the contract is sealed. This means escrow must now be opened. 

Highlights of the Buyer Counter Offer Form

In the event that the buyer wishes to issue a counter offer of their own, they would use a Buyer Counter Offer form. This can be used in response to either a Seller Single Counter Offer or Seller Multiple Counter Offer. 

Make sure to check off the box to indicate whether you are using this form in response to a Seller Counter Offer or a Seller Multiple Counter Offer. Like the previous forms, you can list your counter terms in the “Other Terms” field. Likewise, if you’re including additional documents, you would do so using a format similar to those discussed in the previous forms. The déjà vu doesn’t stop there. If you want to institute an expiration date that differs from the three-day standard, you’d specify so in the “Expiration” section. 

Upon completion of the Buyer Counter Offer form, the buyer signs at the bottom. If the seller has no counter offer to this form, they can sign to seal the binding contract that initiates escrow. 

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Jenny Manukyan is the Transaction Manager here at JohnHart Real Estate, as well as an agent herself. Being the supervisor and "linchpin" in our short sale operations, has endowed Jenny with invaluable knowledge; and here on the JohnHart Gazette she hopes to share that with you all!

About Jenny Manukyan

Jenny Manukyan is the Transaction Manager here at JohnHart Real Estate, as well as an agent herself. Being the supervisor and "linchpin" in our short sale operations, has endowed Jenny with invaluable knowledge; and here on the JohnHart Gazette she hopes to share that with you all!

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