Reader Question: If you make a full price offer on a property, can the seller come back with six thousand dollars more than the listing? Isn’t a listing a good faith agreement to sell for that price? Mike C.
Monty’s Answer: The seller can counter-offer the list price with a higher price. It would be helpful to give the buyer a reason by allowing the agent to share it. There could be extenuating circumstances the seller (or agent) has little control over. If the seller (or the agent) is using this tactic with every potential buyer, a better solution may be to raise the price. Your words “good faith” were right on without additional information. As a buyer, you have three choices here:
1. Do nothing. Doing nothing will cause the counter-offer from the seller to expire. It is rejecting the seller’s counter-offer by silence.
2. Counter-offer back to the seller. Regardless what dollar amount you use, you are still rejecting the seller’s counter-offer. What is different here is you are communicating with the seller.
3. Accept the seller’s terms. In this scenario you hope the negotiation is over. It is not clear in your question if $6,000 could buy you more house somewhere else.
This circumstance is not common but is most likely to occur in a hot market where homes are receiving multiple offers and often for more than list price. Most listing contracts specify the seller will be liable for the commission if the agent brings a solid full-price offer, but the seller is not required to accept any offer.
More rules good to know
• An agent cannot solicit listings while listed with another agency.
• The agent entitled to the sales commission is the agent introducing a property to a buyer.
• All documents must be signed by all parties to the transaction.
• Fixtures stay with the property unless the parties agree that the seller may take them. Personal property does not stay with the property.
• In addition to the sale price, the buyer and seller both incur additional customary closing costs.
• Any MLS member can show and sell any home listed by any other MLS member.
• In many cases, your agent will not know if there is another offer on a property.
• There is no law or rule preventing a buyer from offering to pay more or less than the listed price, nor the seller from counter-offering.
• The listing agent is the only agent that can consult with the seller unless the listing agent grants permission or the seller initiates a conversation.
Rules Regarding Offers
• The agent who wrote the offer and the agent who presents it to the seller should be the only individuals to know the offered price and terms.
• Sellers should be notified of the existence of an offer as soon as it is signed by the buyer.
• Offers should be presented in person and in a timely fashion.
• The agent drafting the offer should keep the buyers informed as to the status of their offer.
• Although circumstances vary, and sellers usually want a long time to deliberate, and buyers want the seller to decide quickly, 24 to 48 hours is considered reasonable.
• The description of all terms must be in writing in the agreement.
• Pre-printed, industry approved, or state-approved state forms are the only legal way an agent can draft an offer without an attorney.
• The accepted offer is only legally binding upon delivery to the buyer.
• Either party may withdraw or modify an offer prior to acceptance by the other party.
• There is no legal priority as to which offer is considered or be dealt with first. The seller can choose to sell to a buyer who offers less.
• The broker is obligated to present “any and all offers” to the seller by law unless the seller instructs otherwise.
• Counter offers are in effect rejections and do not give a buyer priority regarding negotiations.
These rules do not become a part of the conversation unless a misunderstanding over one arises. Each region of the country may have variations of these rules. Ask an agent in the location you plan on transacting business for changes or additional rules.