Is The First Offer Really The Best?
It’s important to know that negotiating is not just about price, it is also about terms…that’s part of the offer.
This is an old agent’s ‘tale’ that we tell Sellers even today. But why? Is it true?
Many skeptics think that the agent is just trying to make a ‘fast buck’ and get the deal done so they don’t need to work on it anymore. If you have a good, ethical Realtor (which most are, though some may be misguided or undereducated), we really have YOUR best interests in mind.
When we first list your home on the market and Buyers take notice, it’s like a shiny, new bauble. If the price is in line with similar homes, even if it’s just a tad above, Buyers will come quickly!
Price DOES matter at this very crucial time. You have one chance to make that first impression. If your price says “Dare me” or “..and a bag of chips”, the property had better have features, upgrades and other reasons to back it up. Your agent needs to capitalize on those features in their marketing, as well.
Otherwise, your impression is not a good one which may mean no Buyers.
Statistics and trends your professional real estate agent knows include:
- How many homes are for sale in the local market by city & neighborhood.
- How many homes are for sale in your subdivision
- How long the average home stays on the market until it is sold
Price Right – Get Offers
Priced right, you may get multiple offers during the many showings you’ll have. Priced wrong? Nada for showings or Buyers. Once the home has sat in the market for over a month, Buyers start to take the idea that a price reduction SHOULD be next, or they can offer a lot lower.
Some Buyers want to wait until the Seller reduces the price. (that answers your question of “why don’t they just offer SOMETHING?”-some like YOU to make the first move, show some intent). Some will ‘lowball’ to test the waters. Agents will research the property harder to see why it’s not moving. Is there a reason, other than price? Location? “Puffing”? Lack of information to whet a Buyers’ interest?
The first offer will come in the first month or less, depending on the state of your market. Weigh the offer between what it costs you to NOT sell for another 3 months (relocation issue, mortgage payments, and other pertinent costs to you) and how you might want to counter it, if you don’t think it’s quite good enough.
My suggestion is to ALWAYS counter even if the offer makes you cringe and not want to deal with it. Can’t hurt to tell the Buyer exactly what you will accept. You lose early if you don’t counter.
“…That first offer you turned down has now turned into seller remorse. Hindsight waves it’s hand. Unfortunately, it’s too late..”
I have had multiple instances where the first offer was the ‘money shot’ but the Seller was offended, even just a $10K lower offer! I couldn’t convince them to go with it, and that’s their right. Sadly, agents get blamed later for the loss, even if the Seller was the deciding factor.
Now the home is still sitting on the market, or you’ve fired that agent, and hired another one. All the online sites now show the length of marketing of a property and when/whether it sold before moving to a new brokerage or going off market. Buyers will use that to a price advantage when making the next offer.
Give your Realtor a chance to help you understand your position in the market, and trust them to be looking out for YOU. It’s in our Code of Ethics, and most follow it well. Take a deep breath, listen, learn, and SELL!
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