Does the seller have to give a buyer a counter offer? The short answer is no. The seller is under no obligation to respond in any shape, manner or form. Is it smart for a home seller not to respond even if the offer was very low? No. But is it in their right to do so? Absolutely.
Seller’s Four Options When Receiving an Offer
The seller has four options when receiving an offer. Those options are:
- Agree with all the offer points and accept the offer
- Decline the offer – hopefully in a gracious manner
- Propose a counter offer
- Don’t respond
Why Wouldn’t Sellers Propose a Counter Offer?
Of course, not responding is rude, disrespectful and shows a gross ignorance of the negotiation process. Why would a presumably serious seller not make a counter offer to a bona fide written offer? The answer, in my experience, lies at the fault of the listing agent.
Smart Sellers Counter Even Low Ball Offers
The listing agent’s job is to educate the seller about the negotiation process. Sellers need help; they don’t negotiate very often. The listing agent cannot control what the buyer offers, but the listing agent can advise the seller that the offer is the first step in a process to find common ground. Buyers rarely make their first offer their best offer, and occasionally their first offer is a good deal away from what they will really accept.The listing agent should make every effort to convince the seller to propose of counter offer and attempt to advance the negotiation.
Smart Buyers Don’t Make Low Ball Offers
On the other hand, buyers who make “low ball” offers – especially in a highly competitive housing market like Austin – are doing themselves a disservice. Patently low ball offers will alienate inexperienced sellers very quickly as they can’t separate the emotional value of their home and the business details of the transaction. Sometimes when the seller (or buyer) feels insulted, personal ego enters the equation causing everyone to sour on the deal. Deals that would have probably come together are lost because someone’s ego is damaged than any other single reason. Now, don’t misunderstand us. We aren’t saying buyers shouldn’t negotiate lower than list price offers. What we’re saying is don’t offer $100,000 for a home that’s priced (and supported by comps) at $500,000.
Buyers Don’t Know How to Respond to No Response
In today’s Austin real estate market, it’s not uncommon for the seller to respond to “bad offer” by either not responding or simply rejecting the buyer’s offer without any kind of reason. I don’t think that’s a smart approach, but it happens. With so many multiple offers and more than a few over-bids occurring, many buyers are bewildered about the best course of action and how best to proceed. After all, they don’t buy a home very often so they don’t get a lot of practice.
Work with a Buyers Agent who Can Educate and Coach You
It’s extremely important that a home buyer work with a Buyer’s Agent who is willing and knowledgeable enough to guide and counsel the buyer through each step. To be clear, the buyer’s agent’s job is to educate and explain what options the buyers has and what may or may not be feasible. The buyer’s agent’s job is not a decision making role, but rather that of being a knowledgeable counselor and adviser; the buyer is the sole decision-maker because – after all – it’s your money and your decision.
Ready to Start Your Home Search in Austin?
Check out our Austin Home Buyer Representation Program to learn more about our team and how we’re different than your average Realtor. Then, call us at (512) 827-8323 or email us at info@11OaksRealty.com to schedule a no obligation consultation.