Short Sale – Can the Seller Make a Counteroffer?

The seller of a short sale listing has the right to make counter-offers or even reject an offer outright.  If a seller receives an offer that they believe is too low for their mortgage lender to approve, then the seller may negotiate with the buyer to increase the offer price.

Some buyers will be puzzled as to why they receive a counter-offer from the seller.  These buyers prefer to have the seller sign off on their low offer, take the property off the market, and submit the low offer to the bank in the hopes of a short sale approval.  By accepting a low offer, the seller might be missing out on a higher, better offer from another potential buyer.  Yet it is also possible that the bank might issue a short sale approval on a low offer some of the time.

If an offer price is a little low but still close to fair market value, it is advisable for the seller to accept the offer and submit it to their bank.  If the bank issues a counter-offer to the buyer, the buyer will perceive that the bank is the bad guy in the negotiation process.  That way the seller preserves some goodwill in the negotiation.  The seller may be more likely to receive a late-stage concession from a buyer who appreciates that the seller did not issue any counter-offers themselves.

If an offer price is ridiculously low, it may be best for the seller to issue a counter-offer to the buyer.  If the buyer is truly interested in the property, they may come up in price.

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