How Do Counteroffers Work When Buying a Home in Minnesota?

A counteroffer is the seller's written response that changes one or more terms of your offer instead of accepting or rejecting it. You can accept it, reject it or counter back before its deadline. A seller who counters is usually telling you they are interested in reaching a deal.

What a counteroffer is

When a seller counters, they are saying three things. They want to sell to you. They are not satisfied with the terms you proposed. And they believe a deal exists somewhere between your position and theirs.

Legally, a counteroffer is a rejection of your original offer combined with a new offer from the seller. That means your original offer is no longer active. You cannot go back and accept it later if you dislike the counter.

You then have three choices.

• Accept the counteroffer, which creates a binding contract on its terms.
• Reject it, which means there is no contract.
• Counter back with changes of your own and send the negotiation to the seller for another round.

What can be countered

Price is the most common subject, but any term of the purchase agreement can be countered.

• Closing date. A seller may want a faster closing because they have found their next home, or a later one because they need more time.
• Contingencies. A seller may ask for a shorter inspection period or changes to other contingency terms.
• Personal property. A seller may accept most terms but exclude an appliance they want to keep.
• Closing cost credits. Some sellers prefer to hold firm on price and offer a credit toward your closing costs, or the reverse.
• Earnest money. A seller may ask for a larger deposit as a show of commitment.

The deadline

Every counteroffer comes with an expiration date and time, the same way your original offer did.

If you do not respond before it expires, there is no contract. The seller is then free to negotiate with other buyers. Your agent should tell you the deadline as soon as the counteroffer arrives, so you know how much time you have to decide.

How to evaluate a counteroffer

It is tempting to answer right away, out of excitement or frustration. Taking time to think almost always leads to a better result.

• Compare the seller's price with recent comparable sales. Your agent can tell you whether the market supports it.
• Look past the price. Check whether the closing date and any contingency changes work for you.
• Decide what matters most to you. If a certain closing date is essential, you may give more on price to secure it.
• Consider the seller's position. A home that has been listed for a while and a home listed yesterday often come with different motivations.

Countering back

If you counter, your agent prepares a written response that changes the terms you want and sets a new deadline for the seller.

The question is how much to move. Moving too little, especially after the seller has moved a meaningful amount, can signal that you are not negotiating in good faith. Moving too much in one step can leave you paying more than you needed to.

One approach is to split the difference. As an example only, if you offered $290,000 and the seller countered at $315,000, a response of $302,500 lands at the midpoint. Another approach is to move toward the seller's price while asking for something in return, such as a credit toward closing costs.

If the seller's moves are getting smaller from round to round, they may be close to their limit.

When to accept, counter again or walk away

Accepting makes sense when the terms work for you financially and practically, and the comparable sales support the price.

Another counter makes sense when there is still real room between the two positions and the seller's last response showed flexibility.

Walking away makes sense when the gap is too large to close without straining your finances, or when the seller's terms are unworkable for you.

Put everything in writing

In Minnesota, counteroffers should always be in writing. A verbal comment from the seller's agent that the seller might accept certain terms is not a counteroffer and binds no one.

Counteroffers here are typically handled on the standard Minnesota Association of Realtors purchase agreement forms and addenda. For legal questions about a specific contract, confirm with a real estate attorney.

Common questions

Can I accept a counteroffer verbally? No. Your signed written acceptance is what creates the binding agreement.

What if I accept and then change my mind? Once you sign, you are bound by the contract. Whether you can exit depends on whether you have valid contingency grounds.

Can the seller change the counteroffer after sending it? If you accept in writing before the seller withdraws it, the contract is formed on the counteroffer's terms. An attorney can confirm how this applies to your situation.

Is it rude to counter back more than once? No. Several rounds are a normal part of negotiating, as long as both sides are making real movement toward agreement.

If you would like help thinking through an offer or a counteroffer, send us a message. We'll walk through the terms with you. You can also read more about the buying process.