We have just listed our house for sale and have already received an offer. What shall we do? Should we accept it?
Sometimes when everything goes right we have trouble accepting that fact. Perhaps nowhere is this phenomenon more clearly illustrated than in the case where a seller receives a good offer right away.
All real estate agents are well stocked with stories of sellers who refused to take a good, but not perfect, first offer and who then waited a long, long time before finally accepting something else at a considerably lower price.
And most agents who have been around for a while know to shudder when a good, strong offer is made almost at the outset of a listing, for the seller’s reservations are almost inevitable: did we list it too low, if someone will offer this much so soon, maybe we should wait a while and see if we can get more, etc.
As an antidote to the ill effects of the “curse of the first offer”, a couple of observations might be kept in mind.
First, the fact that an offer is received early in the listing period — even in the first few days — doesn’t mean that the property has been listed too low. It means it has been listed “just right”.
It is easy to overlook how very efficient the residential real estate marketplace has become. A modern, multiple-listing system such as Property Skipper, provides agents and their buyers with virtually instant access to information about existing inventory and about what has newly come on the market.
In the old days a buyer did not become aware of new listings until it was advertised in the newspaper or their agent told them about it. There might have been a lag time of ten days or more from the time the listing was taken.
Today, buyers are able to plug in their criteria and see what has come onto the market almost instantly. Potential buyers learn quickly of the existence of an appropriate new listing. Thus a flurry of activity at the outset of the listing does not necessarily imply a too-low price; rather, it reflects the efficiency of the system.
Secondly, an early first offer does not imply that the seller should hold out for full price.
We all know that there is typically a bit of a dance in the pricing and negotiating for a property. Sellers, with the concurrence of their agents, will usually list their property for an amount that is both slightly higher than what they believe its value to be and a little higher than what they would be satisfied to receive. Why? Because they know that buyers almost always want and expect to pay less than the listed price.
They like to negotiate, the “deal”. However, when an otherwise acceptable offer comes in near the outset of a listing period, sellers are frequently tempted to hold out for full price, or much closer to it than would normally be expected. Caution should be exercised in this regard.
For one thing, as we have noted, exposure of the property to buyers occurs pretty quickly nowadays and sellers shouldn’t assume that there are going to be more, much less higher, offers as the listing period progresses.
Secondly, there often can be a transactional benefit to “leaving something on the table”. A real estate transaction is a process. These days, with inspections and disclosures and appraisals, there may be “second negotiations” during the course of escrow. A buyer who feels ground down in the purchase negotiation may well be more difficult to deal with as other issues arise.
Final thought: If you are a seller be aware that the internet can feed people a lot of information very quickly. Some buyers who have been looking for a while recognise when the perfect property comes along and are ready to move right away. Don’t let this frighten you. Sometimes the first offer is the best and if you feel that everything is moving too quickly ask to extend the date of closing, that will give you the time you need to adjust emotionally and find another property.
Don’t worry, if you have a good agent they will explain it carefully, look out for your best interests and hold your hand every step of the way.
•Heather Chilvers is among Coldwell Banker Bermuda Realty’s leading sales representatives. She has been working in real estate for 27 years. If you have a question for Heather, please contact her at firstname.lastname@example.org or 332-1793. Read this article on Facebook: Ask Heather Real Estate