Young Man Making Counter Offer To Bid On Home For Sale.

How To Prepare A Real Estate Counter Offer

Melissa Brock6-minute read

March 01, 2022


From the outside looking in, real estate counteroffers can seem like bartering for an object at a flea market. However, counteroffers can help both buyers and sellers get close to what they both want out of the transaction.

Home buying can be stressful enough, let alone putting an offer on a property you really want and then worrying if the seller will take it. If they come back to renegotiate, it's important to remember that you're not alone when working through what’s called their counteroffer. Your real estate agent or REALTOR® can act as a go-between during negotiations.

Let's dive into what you need to know and share some real estate counteroffer examples.

What Is A Counteroffer In Real Estate?

Counteroffers become part of the home buying and selling process after home buyers make an offer on a house and the seller wants to make changes to it to better fit their sale goals.

A counteroffer in the home buying process refers to a return offer given by the seller in response to the original bid. When a seller gets an offer, they can choose to accept, reject or counter. In return, if the seller makes a counteroffer, a buyer can choose to accept, reject or counter it.

Home sellers and buyers alike use this tactic to negotiate the best price and terms possible.

How Does Making A Counteroffer On A House Work?

Several scenarios may warrant a counteroffer. The counteroffer process looks different for home buyers vs. sellers, which we'll detail below.

For The Seller

Sellers can counter a buyer’s initial offer to change the price or increase the earnest money deposit.

For example, let's say you’re the seller and you list your home for a price of $220,000. However, a buyer offers you $200,000 instead. Maybe you're still interested in signing a contract with that buyer for your home. If so, you make a counteroffer for $210,000. At that point, the buyer may agree to that price, or the buyer may counter in response to your counteroffer. To make your counteroffer stronger, you may want to provide comps, or comparable homes in the area, to show why that price is reasonable.

Sellers can make counteroffers for other reasons, too, such as changing the closing date or for contingency periods. Sellers will typically go about communicating the terms of the counteroffer through their agents and may also put an expiration on the counteroffer to speed along the home sale process.

For The Buyer

Buyers can also counter a seller’s counteroffer, as we mentioned in the previous example. There are no limits to the number of counteroffers that you can submit as a buyer.

Home buyers first create an offer that may be below the asking price when they want to negotiate the house price presented by the home seller. Then, the home seller may counteroffer with a price that’s higher than the buyer’s original offer, but lower than the original asking price. If the buyer thinks the price is still high, they could counter.

Let's take a look at our previous example, only this time, you're the buyer. A seller lists a home for $220,000 and you, the buyer, offer $200,000. If the seller comes back with a $210,000 counteroffer, you could accept the deal or counter $205,000, for example.

In another scenario, you might counter because a home inspection reveals issues with a property, such as a cracked foundation. You can ask the seller to take the price down to $200,000 if you find out that it will cost $20,000 to fix the foundation issues.

Buyers go about resending the terms of the counteroffer to the home seller through their agent.

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3 Tips For Making A Counteroffer

Let's take a look at a few negotiating strategies for those hoping to make a counteroffer that the other party will accept.

The tactics in the following list could even be used to win a bidding war.

  • For sellers: Pay more of the share of closing costs. Sellers can offer to pay some of the buyer’s closing costs. Closing costs usually run 3% – 6% of the mortgage loan amount, so take a look at your budget to find out if you have enough wiggle room to help with the closing costs.

  • For buyers: Increase the earnest money deposit. The earnest money deposit is an important tool in a real estate transaction because it communicates to a seller that you're serious about buying. Increasing the earnest money deposit can help make the offer more attractive. Normally, people put down about 1% – 3% of the sale price. Adding more could sweeten the deal for the seller.

  • For sellers: Exclude or add personal property. Personal property, such as furniture and appliances, can be included in a home sale negotiation.

What If My Counteroffer Is Rejected?

If your counteroffer is rejected, you have a couple options. You can choose to walk away from the deal or create a different counteroffer. You’ll typically have 1 – 3 days to prepare and send the new counteroffer.

Keep in mind that once you make a counteroffer, the original offer (or counteroffer) is off the table. If your counteroffer is rejected, you usually cannot go back and accept the previous offer.

It's important to collaborate with your real estate agent to improve the offer by tailoring it to the other party’s motivations or weigh your pros and cons to determine whether you should look for a new home or a new buyer.

When Should I Accept A Seller’s Counteroffer?

As the buyer, when should you decide to accept a seller’s counteroffer? In a hot real estate market, an offer may only go on the table for 24 hours or less. Keep in mind, you’re not yet in contract and the seller could get another (better offer) in the meantime, while you're still going back and forth.

Review the following factors before you accept the counteroffer:

  • Contingencies, which refer to requirements that must be met for the sale to go through
  • Sale timeline
  • Whether the seller's counteroffer fits into your budget
  • Whether you understand all parts of the counteroffer

Once the counteroffer has been accepted, the buyer and seller then sign a contract. The buyer must then secure financing and the seller must then complete any repairs stated in the agreement.

FAQ: Real Estate Counteroffer

Let's take a look at answers to common questions about real estate counteroffers.

Can sellers make counteroffers with multiple buyers?

State laws vary on whether a seller can participate in more than one sale negotiation at a time. Ask your real estate agent about the laws in your particular state. Sellers should not make several counteroffers at once. Not doing so benefits all parties involved.

When should I walk away from a real estate negotiation?

Buyers or sellers should not feel obligated to continue negotiations if they don’t feel comfortable with the sale price or agree with the terms of the counteroffer, such as waiving the home inspection contingency.

Other red flags that buyers should recognize as signs to walk away from a real estate negotiation include:

  • The appraisal comes in lower than what you've offered.

  • The home inspection reveals some major problems with the home.

  • Someone else lays claim during a title search.

  • It'll cost a lot of money to insure.

  • The deed restrictions are difficult for you to navigate.

What’s an example of a real estate counteroffer?

Here’s an example of a typical offer/counteroffer negotiation on a home listed for $250,000.


  • The buyer initially offers $240,000 with closing in 30 days. The buyer also asks for the seller’s furniture and for the seller to pay closing costs.

  • The seller counteroffers with a price of $245,000, but does not agree to pay closing costs. However, the seller agrees to throw in the furniture. The seller also wants to close in 40 days.

  • The buyer accepts the seller's counteroffer, agreeing to the price of $245,000 and agrees to the 40-day period to close.

The Bottom Line: Prepare To Negotiate

Bottom line, buyers and sellers can both benefit from counteroffers, but sometimes, it works to one party's advantage more than another.

As a buyer, understanding these concepts can help you negotiate more effectively, make more effective negotiations and stay within your budget.

Getting preapproved for a mortgage is the first step toward making an initial offer on a house. Ready to begin the house hunt? Get preapproved today with Rocket Mortgage®.

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Melissa Brock

The Rocket Mortgage Learning Center is dedicated to bringing you articles on home buying, loan types, mortgage basics and refinancing. We also offer calculators to determine home affordability, home equity, monthly mortgage payments and the benefit of refinancing. No matter where you are in the home buying and financing process, Rocket Mortgage has the articles and resources you can rely on.