JoAnna's Real Estate Thoughts

Preface:  This post isn't so much about a seller not accepting the "first offer" or them wanting to hold out for something better.  It is more about how getting a good offer, too quickly, or one that is unnaturally too high, which later falls apart can have a disasterous impact on the rest of the transaction.

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In today's market, getting an offer the first week a listing is on the market can either be a blessing or a curse, especially if the offer price is TOO high!

Allow me to explain.

You take a new listing.  You work very hard to have the seller understand the closed comparable sales, active competition on the market, as well as where the market is trending.  Of course they want to list high (it is to die for you know) and you want an aggressive list price.  Eventually, although begrudgingly, you agree to try at the higher end of your listing range.

The first weekend the listing is active, you get 8 showings!  Your seller is beaming and ready to start packing because they can tell how much each and every one of those prospective buyers loved their house!

Monday morning you get a call from a buyer's agent, who coincidentally doesn't do much business in this town and has no real insight into what homes sell for in this neighborhood.  Her clients are relocating from Saskatchewan.  They are offering just under list price and need the sellers to get out in 30 days.

These sellers cannot possibly accomodate that timeframe.  They still need to find a house and their kids are in school, they haven't thought about packing and 30 days is way too much an inconvenience and....

Here comes the worst part...

"If these buyers loved the home and are offering near full price, there will be many, many more buyers standing in line right behind them.  Perhaps the home is listed too low?  Maybe we should consider raising the asking price!"

The story above is slightly embellished to make this blog more impactful, but it is based in truth.  The Sellers didn't raise their asking price, but they did end up selling their home, more than 6 months later, for well over $50k less than their original offer!

If an offer comes in too fast or too high and doesn't result in an executed contract this situation can, and often does, create a huge stumbling block for the future progression of the sale process. 

• It skews a seller's expectation.  These fast and furious offers are often more personal value driven and shouldn't be perceived as true indications of market value;
  
  
• It can potentially create a sense of distrust between seller and their agent, especially if the offer is at or higher than the selling agent's suggested list price.  In turn, the seller's agent will have an even more difficult time trying to get the price reduced;

I've shared this with my sellers, up front.  I've told them to be careful what you wish for!

Jo

JoAnna Siminerio
Weichert Realtors - Marlboro / Manalapan
JoSiminerio@optonline.net
www.JoTheRealtor.com
732-598-6823