Made Sellers RE agent a cash offer of $175k on listing price 200K

[Nancy N.]

School me please...I made my cash offer of 175K. Sellers counter at $189K. I'm new to a strategy or "hostage negotiation".

The property is overpriced. The counter is not satisfying. How do I respond to my "buyer" real estate agent? If I counter I'm still not going to get the seller down to my price. I had a contractor look the property over already, the property needs approx. 25K repairs and upgrade, this includes the roof. Additionally, a camera will need to be run down the sewer line. 

Is the best strategy to walk...I have other States I'm looking in... Get earnest funds back and head out...And perhaps they will reconsider an offer or is that a juvenile approach?

Thank you for your assistance. Nancy, (not in Lake Havasu, AZ. On the Road looking at real estate to purchase)

[Matthew Irish-Jones]

Hi Nancy,
Why are earnest funds involved if you have not agreed on a price?

Has a contract been submitted?