Once you make an offer on a piece of property, it probably will not be accepted on the first go-round. It may be, but the Seller will probably counter. Before I get too far into this subject, it would probably be helpful to have a brief discussion of when we do and don't negotiate.
Many gurus and real estate course teachers are always arguing that we should negotiate at every turn. They would tell us to squeeze every last dime of profit out of the deal.  I disagree. Remember, it isn't worth losing a $25,000 profit over $2,000 of
negotiation. I'll cover this area more in a subsequent article on writing offers that get accepted.
If you make an offer that is on a "hot" property, i.e. one that you know will sell quickly because of it's price, you may want to accept the counter and move on. This assumes that the counter offer leaves you sufficient profit.
I recently landed a deal because another investor did not heed this advice. The
investor had negotiated a sales price with a seller, but had not signed a written
contract. The investor then decided to try to negotiate a lower sales price because he determined that a $1,000 electrical repair was needed. The price he negotiated would have made him $40,000 in profit, but he went back to the well one too many times. The seller became enraged, and decided that she did not want to deal with the
investor anymore. The seller received my name from one of my subs who was an
acquaintance of hers, and we were under contract the following day. If you have an agreement that gives you sufficient profit, leave the deal alone and sign the contract.

When you are negotiating to get to a price you can both agree on, adopt the nickel to dime negotiation strategy. You want the seller to come down a dime on price for every nickel you move up.
You will need to work the agents and the owner, and never let the agent know what you are doing, or what your strategy is. Usually when you make an offer, some
response comes back fairly quickly. If the asking price was $130,000, and I offer $100,000, I may get a counter of $125,000 from the seller.
What most people do, I have noticed, is keep splitting the difference. In other words, most people in my position would find the midway point between the $125,000 counter offer and my original offer of $100,000, which is $112,500. The seller would then counter with a number between their last counter ($125,000) and my counter ($112,500), or $118,750. Typically, this is where the action would stop. Most Sellers have the capacity to do two counter offers or perhaps three, but usually no more. I don't know why that is, but that is what my experience has shown me.
Instead of splitting the difference, I offer to increase my offer by less dollars each round. On their first counter, I would raise my initial price by $3,000. Each
subsequent counter would find me giving less each time. This tells the seller that I'm getting close to the highest price I'm willing to pay. This will help to stop things.
Thus with two counter offers, my final sales price might be $105,000 vs. the $118,750 above. I saved $13,000. To play this whole thing through, I offer $100,000. The seller counters with $125,000. I counter with $103,000. Seller counters with
perhaps $118,000. I counter at $105,000. The seller will be worn down at this point. He will be satisfied that he has negotiated hard, and gotten his best price from me.
What if your seller won't even give you a counter offer, and/or if they don't feel that your initial offer is worth countering? If the sales price is too high to make any money on the deal, you may have to walk away. If they won't drop their price, it's not for you. If it could be a good deal, I might wait four or five days and make a
second higher offer or ask the agent if the seller might be interested in making any type of counter-offer. They often will counter verbally, which can start the
proceedings.
There are timing considerations here. If you counter immediately upon hearing back from the Seller on each of his counter-offers, he is in control. He has all the incentive in the world to keep dealing, because the negotiation is not producing any stress for him.