Most Realtors called in to do a Listing Presentation will promise to sell your home for the most money in the shortest amount of time, a promise that is easy to fulfill if you both (the home seller and the listing agent) do everything right. With that in mind, the obvious impulse to hold out for more money should be easily avoided. In other words, when you get the offer that you expect to get, why not take it?
In a balanced market, Realtors often say that the first offer is the best offer and although it is a little counterintuitive, it is often the best practice to accept the very first offer. Note that when I say ‘accept the first offer’ I really mean sign the first reasonable offer received back at a reasonable price that the buyers will feel that they negotiated well (aka: work with the first ‘real’ offer).
The market is always changing. It could take a downturn and leave your home that is priced on past home sale comparables, now priced too high. A home just like yours could enter the market at a lower price. Last year in Kitchener-Waterloo, the market was hot for a month or six weeks and then cold, then hot again, then cool…it was really frustrating.
It does not happen like it did a couple of years ago when he Kitchener-Waterloo real estate market was white hot, but sometimes home sellers will receive a ‘cash offer’ — an offer without any pesky conditions that delay the sale and open the possibility for future negotiations. Accept a ‘cash offer’ and your home is sold.
Days on market
One metric that Realtors keep a pretty close eye on is ‘days on market’. Average days on market is a somewhat useful metric but we have detailed statistics on homes just like yours selling and recently sold so once your home has crossed the predicted days on market and an offer comes in, you really should consider accepting it, (or work with it so long as it is not a crazy train wreck searching lowballer).
New job, new life
I had a client a few years ago after buying a home and moving in for only a year and a half, was offered a job in Silicon Valley at twice his current local salary. “I have to take it”, he said. He was ok with losing a little money on the sale so that he could get on with his life.
Divorce is another case where the best advice is to cut and run. Take the offer and move on.
Good buyer, bad buyer
I had a case a few years ago when I was the buying agent working with clients who won against a higher offer in a bidding war. We didn’t know that the other offer was higher at the time of course but the selling agent told us that the other offerer was so rude and pushy that they simply did not want to deal with them. Sometimes you should simple accept the offer from the buyers you like best.
What would Steve Miller do?
In another case, a few years ago I worked with a daughter who inherited her parents home. She had left Kitchener back in the 1980s and it was quite funny that when she arrived here she kept getting lost. She came back from Alberta to clean the place out and sell it off and she happily worked with the first offer that came in.
The same would be true if you have already purchased another home. You don’t need the emotional pressure of holding out for a better offer and potentially the cost to bridge your mortgage.
Conclusion: It’s the BIG picture
So I suppose this blog post really comes down to one thing — big picture thinking. Why hold out for a better offer that may not come when you have an offer in hand. Unless it is a crazy lowball offer, work with it. You’ll likely be very happy you did.