Respond to bank counter offer with firm stance?

Question

When responding to a counter-offer from a bank, what is the best response?
1) inch up the price by $500 or $1000... or even $1500.
2) respond with the same price firm
3) "Serious" counter offer, i.e. 5-10k more.

If it is acceptable to do so, I think I would like to do option 2, because I honestly did not leave any headroom when I offered my best price.
What can I do to sweeten the terms? Decrease closing time from 45 days to 30 days, or is that kind of silly?

Will Barnard · Answer

Impossible to answer with your limited info, however, since u offered your max upfront, u have limited your options. I personally would go back at $1k more which is a statement of, "that was my highest and best" without actually giving an ultimatum.

Steve Babiak · Answer

One way to sweeten the offer is to just increase the amount you have for EMD. Bigger EMD shows you are serious. But only do so at a number you are comfortable having tied up (and at risk if you breach the contract).

Ramon Jenkins · Answer

@David Kimball

This thread is a good example of negotation on REO properties

www.biggerpockets.com/forums/67/topics/75610-a-new-record-set-on-this-one

Don Hines · Answer

Most important to remember is to stay within your parameters. If a higher offer takes you out of anticipated profit, you are out of your parameters.
This question kind of reminds me of when I started making offers to find my second project. I thought me and the bank I bought my first one from was buddies. I searched for every REO they had for sale to make an offer on. So, I played some games with them on my next few offers for the second property. They didn't give a hoot who I was and didn't remember I had just bought one from them a few months ago.
Stay firm if you need to to make your numbers work.
Don

Mark H. · Answer

They can and will take higher offers.

David Kimball · Answer

Okay. By the way, is the bank required to stay in dialogue with me exclusively until we come to a price? Or can another buyer come in while I am in this last stretch of negotiation, and just nab it at a higher price?

Bill Gulley · Answer

As Brian mentioned you can intice with other aspects other than price. And I have used what Will says upping the antie by a dollar, that sends the message that your price is firm.

I'd look at the time on the market and the activity of the property to determine your horse trading strategies and remember, the one who speaks first is usually the looser.....

Brian Levredge · Answer

There are threads about this subject that you can search for that have some good insight. This is a numbers game, so if you didn't leave any room on your offer, you either have to stand firm, or reduce your profit margin. With REOs you have to remember that the bank will have you sign an addendum that supercedes the purchase contract. That gives you leeway to get creative with how you write your initial offer. Some examples:

You could have a three day inspection contingency (or no contingency if you've already inspected the property). The bank's addendum will probably give you 7-10 days thus negating your initial offer.

If you are purchasing with cash, you can put in a large EMD.

And as you note, you can offer a quick closing. Certainly, there are more options than these but they're a good start.

Respond to bank counter offer with firm stance?

Respond to bank counter offer with firm stance?

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