What is a seller multiple counter offer and how should I respond?

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What is a Seller Multiple Counter Offer in California Real Estate?

If you’ve ever made an offer on a popular or “hot” home, chances are you’ve also experienced a somewhat common tactic to bring about (or intensify) a competitive bidding war – the seller multiple counter. In California, the document most commonly used for a multiple counter is the California Association of Realtors “CAR” Form SMCO.

Sellers, through their agents, use a SMCO to get the best possible price and/or terms from competing buyers. By sending a counter offer to multiple parties they are giving each would-be buyer an opportunity to change and, in most cases, “improve” their original offer – at least in the eyes of the seller. 

Don’t be surprised to see seller’s counter offer contain the words “Highest and Best” – which is a call to let the bidding war between the competing buyers begin. In such a scenario the motivated (and at this point probably frustrated) buyers have the opportunity to send a new offer with the highest price (and best terms) they are willing to pay for the home. 

A Multiple Counter Offer Is a Rejection of the Original Offer

If you’ve received a Seller Multiple Counter Offer, your original offer is no longer on the table. Counter offers function as a rejection of the original offer. 

If you’ve received a SMCO, your options are to: 

1) Accept the counter offer and hope the seller does not receive better terms from another competing buyer (unless this is a “highest and best” situation – in which case you would need to counter with specific terms).

2) Counter the seller with different, new terms.

3) Not respond.

If you’re considering option 2, you’ll want to make sure your (experienced, communicative, and savvy) agent is in contact with the seller’s agent both to let them know you plan to respond to the seller’s counter (see below) and to find out as much information as possible about what the seller will accept!

Does a Seller Always Ask For More Money?

Not necessarily. In some cases, a seller may be completely satisfied with the price point of the offers received, but would like to see different terms. For example, a rent back, extended close of escrow, removal of a contingency(ies), etc. 

Be sure your agent is in touch with the seller’s agent to get as much information as possible about the seller’s desired terms.

Is My Counter Offer the Same as the Counter Other Buyers Received?

Not necessarily. A seller can tailor their counter offer to each competing buyer’s offer by sending different counter offers to each party. See paragraph 2 CAR Form SMCO – “terms (sent to other buyers)…may or may not be the same as in this Multiple Counter Offer.”

What Happens If I Accept the Seller's Multiple Counter Offer? Do I Get the Home?

Unfortunately, no. Unlike a regular Seller Counter Offer (where the counter offer is sent only to one party) – accepting a Seller Multiple Counter offer does not mean you automatically get the home.

CAR Form SMCO states that accepting the terms of the Multiple Counter Offer would only bind the seller if seller signs paragraph 8.

Can the Seller Accept Another Offer Before I Respond?

YES! Beware that time is often of the essence when responding in a Seller Multiple Counter situation. The seller is not obligated to wait for your response, even if they’ve set a deadline for response in the counter. Nothing prevents a seller from quickly accepting a buyer counter offer that meets or exceeds their sale expectations.

Again, you’ll want to make sure your agent stays in communication with the listing agent throughout the multiple counter process.

Where Can I Find More Information About Counter Offers and Buying a Home?

You’ve come to the right place. Our agents at YayPad have represented hundreds of buyers throughout California (including the San Francisco Bay Area, Los Angeles, Sacramento, and San Diego) who have successfully won multiple counter situations. 

Get in touch with us if you have questions about the home buying process – we’re always on. Oh, and we rebate 50% of our commission, putting thousands back in your pocket!

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