Think Your Offer Won't Be Rejected? We do it nicely here in Texas

NOTE: This article is part of the forthcoming book, the Gotcha Guide™ to Buying or Investing in Real Estate.

My seller clients were negotiating with a cash buyer this weekend who made a seriously low offer.

For background, their home is back on the market because the previous buyer backed out the day before closing. This new buyer made a cash offer that's $35k below the September appraised value. I gave the sellers their options on responding to any offer in Texas:

1. They can accept the offer in writing as-is.
2. They can counter the offer by making changes and initialing them.
3. They can reject the offer entirely by simply not responding or writing "rejected" on the contract.
4. They can reject the offer nicely by using TAR (Texas Association of REALTORS) form 1926 “Seller’s Invitation to Buyer to submit New Offer". Download 1926.pdf. 
   

THE PROBLEM WITH COUNTER OFFERS
Here's a warning! It's typically recommended that sellers work with any offer that's serious, especially in this mortgage market. That said, here are 3 Gotchas with Counter Offers in Texas:

• When you make ANY change to the initial offer, you've officially put a new offer on the table (i.e counter offer).
• A counter offer is a legally-binding offer from you. It's valid until you withdraw it or it's rejected.
• Once you counter an offer by making ANY change, the buyer's initial offer is off the table. They can then choose to accept your changes, not respond, or reject, etc.

If you think you may have other offers coming in, you may try using TAR form 1926 “Seller’s Invitation to Buyer to Submit New Offer". The upside of using this form is that you are not bound by a counter to the buyer. This is still a rejection, but it sounds oh so nice...

Read more about the Mortgage Market in Texas and How to Approach this Changing Market.