Is the first offer usually the best offer?
Many a seller has mulled over this old chestnut when receiving an offer in the first few days of a campaign and the subsequent deliberations can be agonizing.
Should you wait until after the first set or two of Open Homes? What if the buyer walks away? Can you trust your agents’ advice or are they just after a quick sale?
In my experience, sellers often find assessing early offers tricky.
Trust doesn’t come easy in real estate. It is not traditionally a transparent industry and has a reputation for being self-serving.
Because of this, when ‘the first offer is usually the best offer‘ cliche is trawled out there can be consternation as sellers scramble to get to grips with whether or not the advice they are being given is in their best interests – or just the agents.
Here are FOUR steps to help you assess your early offer.
1. How does your offer measure up against the statistics in your appraisal?
Most sellers hope for a bit more than market, that’s just human nature. If that’s the case with you, don’t worry, you are in the majority. Agents tend to be the same with their homes.
Set aside the number in your head for a moment and objectively compare your property with the comparable statistics in your appraisal. All of them. N
Does your offer put you in the bottom 50%, top 25%, over 90%?
Looking at this will give you an idea of how likely you are to receive a similar offer in the future.
2. Consider your market.
Is the market rising, falling or stable?
A rising market is forgiving. A falling one is not. Stable is good but can be slow.
3. Look at median days to sell.
REINZ give a snapshot of median days to sell for most Auckland suburbs. If the agent hasn’t told you what yours are already, ask them for this information. You could even take it a step further and ask for median days to sell for X number of bedrooms.
Lengthy median days to sell often indicate high supply in relation to demand or just low demand.
4. Check out your competition.
It can be hard to be objective about this, particularly if you are living in the home you are selling. Looking at your buyers’ other options is important though. How hot is your property?
Now put it all together.
How is that offer looking now? Your own analysis of the above should give you enough information to evaluate, with reasonable accuracy, the likelihood of receiving another offer like this one.
Is your offer statistically hot?
Don’t be an Ostrich!
It’s fine to want more than market but…
Remember why you’re moving.
If you have a compelling reason to sell you will do yourself a disservice if your decisions are guided by emotion rather than logic. Don’t shoot yourself in the foot.
*Did you know that Ostriches don’t actually bury their heads in the sand? We’re clearly dispelling more than one myth today…
Your buyer won’t
One of the saddest phrases in the English language is ‘If I only had’. It is common for sellers to regret rejecting an early offer that they should have taken.
“If that’s what we’ve been offered now just think what we’ll get when we’ve had more people through!!”
While ‘the first offer is usually the best offer’ may be a myth it is definitely the norm for you to receive the most buyer attention in your first couple weeks on the market. If you’ve had the good fortune of receiving a statistically high offer and market conditions don’t give you a reason to believe there is a high likelihood of more I would respectfully suggest you take your money and run!
Emotional buyers pay great money but they are also notoriously fickle. You don’t want to end up crying into your coffee about what could have been.
Is your offer pretty average?
Don’t let yourself be intimidated into taking an average offer.
Your home is your biggest asset and making the most of it is going to make your next step a whole lot easier.
If the statistics tell you that you will likely see this offer again then allowing yourself the time to get more buyers through and hopefully create some competition is a really great idea.
Again, one of the most important questions a seller can ask their agent is ‘Why?’ When in doubt, ask for more information.
Asking ‘Why?’ ensures you receive the information needed to make an informed choice, as well as prevents the unscrupulous from preying on your ignorance.
This often gets sellers in a muddle…
Listening to too many people.
Analyse the data, consult with your professionals but outside of that, be very careful who you listen to.
When you put a property on the market everyone you know who lives in a house will likely give you their opinion if you’re willing to listen. If your friend or family members advice to you is contrary to market evidence then do yourself a favour and treat it with due caution. Bad advice costs people thousands frequently.
Thank you for visiting! I hope this post has been helpful in guiding you through assessing your early offer.
Good luck with your sale!