Early offers on your home
If you receive a good offer for your home shortly after you have listed it for sale, you should consider it very seriously, even if it isn't perfect.
"With the average selling time currently being around 15 weeks, we find that most home sellers don't expect to get any offers within the first few days or even the first month that their home is on the market," says Jan Davel, MD of RealNet.
"So when they do get a quick response, their first reaction is generally not the happy one you might expect. It is instead an almost instinctive rejection of the offer on the grounds that they must have set their asking price too low, or that they have plenty of time to get other offers close to their asking price."
However, he says, the annals of real estate contain many instances of sellers who refused a good, if not perfect, first offer and who then had to wait a very long time before any more came in – very often at much lower prices than the first.
"What sellers need to bear in mind is that the real estate marketplace is becoming increasingly efficient, with homebuyers not only being able to sift out unsuitable – and overpriced – properties on the Internet, but also to request immediate email or SMS alerts as soon as a property that does match their criteria is listed.
"What is more, with home financing being more difficult to come by, and many estate agents being unwilling to show homes to financially unproven buyers, an increasing number of buyers these days consider it prudent to obtain home loan pre-approval.
"This means they know exactly what they can spend and it makes them very value conscious, so that when they find a home they like and believe to be good value, they will often make an immediate offer."
Secondly, says Davel, an early first offer does not imply that the seller should hold out for full asking price.
"We all know that most sellers will set an asking price for their property that is both higher than what they believe its value to be and higher than what they would actually be satisfied to receive, in order to give themselves some 'room to negotiate' with buyers, who they know almost always want and expect to pay less than the listed asking price.
"And yet, when an acceptable offer (one that is close to the seller's actual expectations) comes in just shortly after the property has been listed, the typical reaction is to reject it and refuse to negotiate at all. But we know from experience that it's usually a serious mistake to assume that there are going to be many more offers, let alone many more at higher prices.
"In fact the latest statistics show that more than 80% of the time now, sellers have to accept an average 12% reduction in their asking price to achieve a sale at all – which shows just how rash it might be to reject an early offer from a serious buyer that is perhaps five or even 10% below your asking price. Indeed, we believe that if you get an offer like that, your instinct should be to 'take the money and run' – or rather, to secure your sale and leave others to dither, dicker and run up their holding costs."