You've made an offer on your dream home, and the seller just sent back a counteroffer. Your pulse quickens, and you need to figure out what's next. Do you accept? Counter back? Walk away?
Maybe you're on the flip side — you're the seller who just received an offer that's $20,000 below asking, and you're wondering if countering will drive the buyer away or bring them closer to your number.
Counteroffers are where most real estate deals get made or broken. They're the back-and-forth dance that determines whether you buy the house, sell for your target price, or watch the opportunity slip away. But here's what makes this especially tricky right now: the August 2024 NAR settlement changed how counteroffers work.[1] Buyers now negotiate their real estate agent's commission as part of the offer itself, creating a "three pots" problem where price, concessions, and commission all interact.
Whether you're buying or selling, you need to understand not just the mechanics of counteroffers but the psychology, the math, and the legal implications. A counteroffer isn't just a polite suggestion — it legally voids the original offer and sets new terms that both sides must navigate carefully.
What is a counteroffer in real estate?
In the most basic terms, a counteroffer is a reply to an offer that's already been extended. It might include a new price, different (or fewer) contingencies, an adjusted closing timeline, or any other change to the original offer.
How counteroffers work: the back-and-forth process
Many first-time buyers genuinely wonder: can I counter a counteroffer? The answer is yes — counteroffers go back and forth until both sides agree or one party walks away. There's no etiquette violation in countering a counter; it's how real estate negotiation works.
Here's the typical flow: you make an offer, the seller counters with different terms, and then you can accept their counter, counter back again, or withdraw entirely. This process can continue through multiple rounds, though most deals resolve within 2-3 exchanges.
A counteroffer legally voids the original offer (and what that means)
Here's what some buyers and sellers don't realize: the moment a seller makes a counteroffer, your original offer is dead. You're no longer obligated to honor those original terms, and the seller can't go back and accept your first offer if they don't like your response to their counter.
This is crucial to understand tactically. If you're a buyer and receive a counteroffer, you're negotiating fresh terms. If you're a seller, once you counter, you can't fall back on the buyer's original offer; you're committed to the negotiation path you started.
Verbal vs. written counteroffers: What's enforceable
"If the listing agent gives out a 'just redraft your offer' to the buyer agent instead of putting it in writing, this is not signaling service, it's negotiating," says Jeffrey Hensel, Broker Associate at North Coast Financial. "The listing agent has kept their client out of the spotlight, and the unwary buyer has negotiated with himself. The fix is simple: Answer in writing and type out verbatim what the seller's agent explained."
Always insist on written counteroffers. Some listing agents will ask buyers to "redraft your offer" with suggested changes rather than sending a formal written counter. This shifts the negotiation burden to you and can create confusion about what was actually agreed upon. A written counteroffer protects both parties and ensures clear communication about terms, deadlines, and expectations.
"Buyers should be careful with this because it is always better to have the terms clearly written down," adds Taylor Szostak, Founder of San Diego Military Real Estate. "If the other side wants changes, they should say exactly what they want in writing."
How counteroffers have changed since the NAR settlement
The August 2024 NAR settlement created the biggest shift in real estate negotiations in decades.[1] Understanding these changes is crucial for anyone entering a counteroffer negotiation today.
Buyer-broker agreements and what buyers commit to
"The biggest surprise I see since the NAR settlement went into effect in August 2024 is that buyers must sign an agreement before they get to see the inside of a property," explains Emma Alves, a real estate attorney at Alves Law. "Many first-time buyers don't know those fees are negotiable."
Before touring any home, buyers now sign written agreements committing to pay their agent a specific commission percentage — typically 2-3%. This changes counteroffer dynamics because buyers know exactly what they owe their agent, and that commission becomes a negotiation point in offers.
Why sellers are now being asked to cover buyer-agent commission in the offer itself
Pre-settlement, buyer-agent commission was automatically included in MLS listings. Now, buyers often ask sellers to cover this commission as part of their offer because Fannie Mae and Freddie Mac don't allow buyer-paid agent fees to be financed into the loan; buyers must pay their agent in cash at closing if the seller doesn't cover it.[2] [3]
According to Clever Real Estate's 2025 commission survey, total commissions average 5.44%, split between 2.77% for the seller's agent and 2.67% for the buyer's agent.[4] This data reflects the new reality where commission splits are negotiated deal by deal.
"One of the biggest impacts of the settlement on counteroffers is that they almost always include some change to the buyer's agent commission now," says Marty Zankich, Director & Owner of Chamberlin Real Estate School. "It was once typical that a counteroffer was just a way to negotiate price, but commissions are now rolled into that process."
This creates what experts call the "three pots" problem: price, concessions, and buyer-agent commission all interact. Sellers must evaluate offers holistically, considering their net proceeds across all three variables rather than just focusing on the listed price.
How to counteroffer as a seller
If you're a seller who's received an offer that you think could be negotiable, here's how to approach the counteroffer process.
Evaluate the offer as net-to-you, not just price
"We see successful deals whenever both sides direct their focus on the full net picture instead of zooming into just one number," explains Tom Nickley, owner at The Nickley Group. "We simply advise them to look at the bigger view — when you see that the home is solid, protecting the deal is what weighs more than just one detail."
When you receive an offer proposing to pay $445,000 on your $459,000 listing plus 3% buyer-agent commission plus $6,000 in concessions, don't just look at the $14,000 price reduction. Calculate your total net profit: you're looking at $445,000 minus $13,350 buyer commission, minus $6,000 concessions, and that doesn't include your own agent's commission and closing costs. The real negotiation is around that final net number.
Decide what to counter on: Commission, price, or concessions
You have three main levers to pull in response.
Commission adjustment
Countering the buyer-agent commission from 3% to 2% saves you about $4,450 on a $445K offer. But be careful. Cutting too drastically can backfire.
"If a seller counters an offer with 1% buyer-agent commission, they're not winning. They're losing the deal," warns Jeffrey Hensel, a broker associate at North Coast Financial. "Now the buyer's agent is working for a 'meals and beer' commission of about $4,450. Their incentive to go to the mat for that seller goes down the drain."
Price increase
Countering at $450,000 instead of $445,000 costs the buyer about $31 more per month at current 6.30% mortgage rates — not insignificant, but often acceptable.[5]
Concession reduction
Reducing concessions from $6,000 to $3,000 keeps more cash in your pocket without affecting the buyer's monthly payment.
The key insight: "When offers get complex, like this $445,000 offer on a $459,000 home with 3% buyer agent commission and $6,000 in concessions, it's a bad idea to counter on commission. This turns the negotiation into a fight," advises Rami Sneineh, vice president at Insurance Navy. "Better to counter with price and come back at $455,000 with lower concessions to make the buyer feel good. A $453,000 closing is better than none at all."
When to counter aggressively vs. accept early
"The most costly mistake that I saw sellers make in 2025 was the decision to pass up a great early offer under the assumption they would get a better one," shares Hensel. "I had one seller receive an offer in their first ten days $12,000 below their asking price. They asked for more, the buyer left, and it went back on the market for 47 more days until they lost their final offer, which was $21,000 below their starting price."
The "first offer is often the best offer" principle remains true in today's market conditions. "Sellers are still in the mindset of 2021, but we're drifting steadily into a buyer's market here in southern California," explains David Samuels, a San Gabriel Valley realtor. "When a listing first hits the market, it attracts the attention of all the buyers who've been waiting for that exact type of house to arrive. That's when the best offers come into play."
Counter aggressively only if you have multiple offers, significant market leverage, or the offer is truly unreasonable. In most cases, focus on reaching a workable number rather than maximizing every dollar.
Setting a deadline and what's reasonable
Give buyers 24-48 hours to respond to your counteroffer. Shorter deadlines can feel aggressive and may push buyers away; longer deadlines tie up your property unnecessarily. Include the expiration time explicitly: "This counteroffer expires at 5 p.m. on [date]."
How to counteroffer as a buyer
Whether you've extended what you think is your "first and best" offer or whether you were giving yourself a little wiggle room, getting a counteroffer back might feel like a challenge. Here's how to negotiate in a way that gets you into a house you already know you like without breaking the bank.
Decide your walk-away number before you counter
Before entering any counteroffer negotiation, establish your absolute maximum, including price, buyer-agent commission you'll ask the seller to cover, and any concessions you need.
Factor in current mortgage rates: at 6.30%, every additional $10,000 in price costs roughly $62 per month over a 30-year loan.[5]
Counter on price, terms, or both
You can counter the seller's price, modify other terms (closing timeline, contingencies, repairs), or both. If the seller countered your $445,000 offer at $450,000, you might split the difference at $447,500, or accept their price but ask for additional concessions.
What to do if the seller asks you to 'redraft your offer'
This is a red flag. This pattern can shift the negotiation burden to you and avoid putting the seller's position in writing.
Politely insist on a written counteroffer that spells out exactly what the seller wants to change.
When to use 'best and final'
A "best and final" offer signals you're at your limit and won't negotiate further. Use this tactic only when you genuinely mean it — if you make another offer after declaring "best and final," you lose credibility and negotiating power.
This works best in competitive situations where the seller has multiple offers and is asking all buyers to submit their highest offer. Don't use it in the first or second round of negotiation unless you're truly at your walk-away point.
Save leverage for inspection
Remember that counteroffer negotiations aren't your only opportunity to adjust terms. The inspection period typically allows for additional negotiation around repairs, credits, or price adjustments based on property condition. Don't spend all your negotiating capital in the initial counteroffer phase.
The math: How price, concessions, and commission interact
To show how these variables all work together, let's examine a worked example and some deeper explanations of how each side might think about the negotiations.
Net-to-seller vs. cash-needed-by-buyer (worked example)
Here's why the "three pots" framing matters: a dollar isn't always worth the same dollar to both parties.
Consider this offer on a $459,000 listing:
- Offer price: $445,000
- Buyer-agent commission: 3% ($13,350)
- Concessions: $6,000
From the seller's perspective, this nets roughly $425,650 ($445,000 minus $13,350 minus $6,000).
From the buyer's perspective, they're paying $445,000 with $6,000 in help with closing costs, but they need $13,350 in cash at closing for their agent if the seller doesn't cover it. Most buyers can't finance agent fees into their loan, making seller-paid commission extremely valuable to their cash flow.
Why $5K on price ≠ $5K on commission ≠ $5K on concessions
Using current mortgage rates (6.30% on a 30-year fixed loan):[5]
- $5K price increase: Costs buyer ~$31/month, affects the appraisal, increases seller's net proceeds
- $5K commission reduction: Seller saves $5K net, buyer must pay $5K cash at closing (or their agent agrees to the lower fee)
- $5K concession reduction: Seller keeps $5K more cash, buyer needs $5K additional cash at closing
The emotional impact varies, too. Price increases feel like "paying more for the house." Commission reductions can frustrate the buyer's agent. Concession reductions directly hit the buyer's closing cash needs.
A simple decision framework for evaluating multi-variable counters
When evaluating complex offers, follow this priority order:
- Calculate your net proceeds across price, commissions, and concessions.
- Consider the buyer's likely response: Cutting commission to 1% often kills deals.
- Factor in market conditions: Aggressive counters work better in seller's markets.
- Evaluate the buyer's commitment signals: strong pre-approval and quick responses suggest serious interest.
- Leave room for inspection negotiations: don't negotiate to the penny upfront.
Special situations
While we can't cover every edge case, there are some common nuances that you might encounter during your home sale transaction journey. Here's how to think about some of the most popular variables.
Multiple-offer scenarios and 'highest and best' deadlines
When you're competing against other buyers, sellers may request "highest and best" offers by a specific deadline. This isn't a counteroffer in the traditional sense; it's a call for final offers from all interested parties.
Submit your best offer, but don't bid against yourself. Base your offer on the home's value and your budget, not on speculation about what other buyers might offer.
Counteroffers with relocation companies or institutional sellers
Relocation companies and institutional sellers often "do things differently," as one real estate professional noted in online forums. They may have stricter procedures, refuse certain contingencies, or require verbal-only negotiations. If you're dealing with a non-traditional seller, ask your agent what to expect from their process.
When the seller's agent makes a 'mistake' on the counter
Occasionally, listing agents send counteroffers with errors — wrong price, incorrect commission terms, or missing contingencies. If you accept a counteroffer and the seller's agent later claims it was a "mistake," you may still have a binding contract depending on your state's laws. Document everything in writing and consult an attorney if significant money is involved.
When the counter sits on one side for days
Sometimes counteroffers expire because one party doesn't respond promptly. This voids the counter and returns both parties to square one. You'll need to start fresh with a new offer or counteroffer if you want to continue negotiations.
Counteroffer template
Real Estate Counteroffer
Property Address: [Full property address]
Original Offer Details:
- Purchase Price: $______
- Buyer-Agent Commission: ____%
- Concessions: $______
- Contingencies: [List key contingencies]
Counteroffer Terms:
- New Purchase Price: $______
- Buyer-Agent Commission: ____%
- Concessions: $______
- Contingency Modifications: [Any changes]
- Closing Date: [Date]
Response Deadline: This counteroffer expires at _____ [time] on _____ [date].
Additional Terms: [Any other modifications or clarifications]
Signatures and Date: [Seller signature and date]
Note: This template is for reference only. Always work with your real estate agent and/or attorney to ensure your counteroffer complies with local laws and covers all necessary terms.
The bottom line
Counteroffers are a normal part of real estate negotiations, but the August 2024 NAR settlement has fundamentally changed how they work.[1] Buyer-agent commission is now a negotiation point in most offers, creating a "three pots" problem where price, concessions, and commission all interact.
The most important things to remember:
- Always insist on written counteroffers, never just verbal agreements
- Calculate your net position across all three variables — price, concessions, and commission
- The first offer is often the best offer, especially in buyer's market conditions
- Leave room for inspection negotiations; don't spend all your leverage upfront
- Set realistic deadlines and stick to them
Whether you're buying or selling, approach counteroffers as a problem-solving exercise, not a battle. The goal is reaching a deal that works for both sides — and in today's market, that means understanding how commission, price, and concessions work together to create value for everyone involved.
Your best asset in a counteroffer situation is an experienced negotiator, someone who knows your local market and can help you get creative in terms of what you're willing to give (and what you want to request) from the other party in the transaction. Clever Real Estate's network of expert agents can help you find the perfect agent for your needs.
FAQ
Can you counter a counteroffer?
Yes. Counteroffers can go back and forth multiple times until both parties reach agreement or someone walks away. There's no limit on rounds of negotiation, though most deals resolve within 2-3 exchanges.
Does a counteroffer void my original offer?
Yes. Once the seller makes a counteroffer, your original offer is legally dead. The seller can't go back and accept your original terms — they must work within the framework of their counter or start fresh.
Can I withdraw a counteroffer?
You can withdraw a counteroffer any time before the other party accepts it. Once accepted, you have a binding contract (assuming all other conditions are met).
What if the seller doesn't respond to my counter?
Sellers have no legal obligation to respond to counteroffers. If your counter expires without response, the negotiation ends and you'll need to submit a new offer if you're still interested.
Is a verbal counter binding?
Verbal agreements can be enforceable in some states, but written counteroffers provide much clearer legal protection. Always insist on written counteroffers to avoid confusion about terms and deadlines.
How long does a counteroffer last?
Counteroffers should include explicit expiration dates and times. Typical timelines are 24-48 hours for residential properties, though this can vary based on market conditions and negotiation complexity.
Can the seller counter my counter to multiple buyers at once?
Yes, sellers can send counteroffers to multiple buyers simultaneously. This is called a "multiple counteroffer" and creates a first-come, first-served situation where the first buyer to accept gets the contract.