Your First Offer Is Usually Your Best Offer

Category: Finance, Real Estate.

An old rule of thumb in real estate is that your first offer it usually your best offer. Several times I have had clients send stiff counteroffers back to prospective buyers only to never hear from them again.

In my experience this is true more times than not. Then after much more time on the market the buyer ends up accepting an offer for significantly less than was initially proposed. Think about the season, time on market, competition and your price vs. your Realtors recommendation. That first offer may not have been what you were hoping for, but it is a wise seller that considers several factors before responding to that first offer. All of these should be weighed when deciding to accept, reject or counter that first offer. Well that activity declines after the first couple weeks, after that many of the buyers currently looking will have already seen your home. Your first instinct may be to hold out for a better offer, especially if your home has not been on the market that long or if there is a lot of showing activity.

Buyers rush out to see newly listed homes. They have been looking for a while and understand the market. If it is the best they have seen, they may make an offer. They are ready to move on the right home. Compare that initial offer to what your Realtors pricing suggestion was. That offer they make is based off of the other properties they have seen during their search and if you' re the seller, they have seen more of the market than you.

After those first few weeks the only showings you will see are from new buyers on the market. They also don' t have the market familiarity built up and will want to err on the side of caution. They are at the beginning of the search and usually are less motivated to make a quick offer. This will cause offers from them to be lower than a buyer more educated in the market. Realtors and buyers become less interested in seeing or showing your property. The longer your home is on the market the more shop- worn it becomes and the perceived value erodes.

Some will wonder what is wrong with your property that it has not sold. There are also the costs associated with holding your property longer. Even if they find nothing wrong, they will be skeptical and offer less so they don' t lose money if they need to sell. Every month that goes by you have a mortgage payment, taxes and cost, insurance payment of utilities. What this adds up to is you are never in a better position to receive the best price than when your home is fresh on the market. All these costs add up over time will quickly erode a few thousand dollars difference in the price received. Even if that offer is less than you were hoping for you don' t want to be kicking yourself in a few months time for not just taking it.

That rule of thumb it more true than not. You may just wish you had. Your first offer is usually your best offer.