A dream scenario for any seller is receiving a full price offer the first day the property hits the market. While this is the goal, it doesn’t always work out this way. There are many factors that influence demand and how quickly a property sells. In almost every sale, there is a crucial point when an offer comes in and the seller needs to make a decision. If you press too hard, the buyer may walk away but if you don’t push firmly enough, you run the risk of leaving money on the table. This is where a good real estate agent earns their commission and offers their expertise. Many sellers are quick to dismiss the first offer that comes in, but you never know if the first offer will be the best one. Here are four things you should do when you receive the initial offer.
Establish Goals: Before any offer comes in it is important to clearly define your goals. Of course, every seller wants a full price offer, all cash and without any contingencies, but this is the exception rather than the norm. Buyers want value and unless you find one that falls in love with the property, there is always going to be some negotiation. Prior to listing you should think about what is most important to you in the transaction. Do you want the highest possible offer without any exception? Do you want a buyer who can close the quickest? Do you want to close without any potential problems? Every seller has their own set of criteria. By determining what you want before an offer comes in it makes it easier to act when they do.
Evaluate Offer:When an offer comes in, it is important to take your emotion out of it. You should never take any offer personally. A buyer may come in strong but ask that a certain item be removed. By taking this personally, you may lose a solid offer. Sit down with your real estate agent and break the offer down. See where it is strong and where it may be a problem. If highest price is your goal, see if there are any strings attached that may make closing an issue. If the price is low, see if there are places where you can negotiate to get the price up. Getting a first offer quickly does not always mean there are a flood of other deals on the way.
Play the “What If” Game:Selling a home is a lot like playing poker in that you must make decisions not knowing how things will play out. If you accept your first offer you will never know what other offers are out there, for better or worse. All you can do is evaluate the current offer and weigh the pros and cons. Every real estate agent is different in their approach, but they can help offer perspective on how you should feel about it. While it may not be exactly what you want you should ask yourself how you would feel if it was the only offer received over the next two weeks. Ask yourself: If your counter offer was rejected would you be willing to live with the consequences? You will never know what else is out there but at least you can live with results.
Make a Plan and Act: Negotiation is the main reason you work with a selling agent. Now is the time you need to listen to their advice and rely on their expertise. As much as you know your home, they are in tune with the market. They know when you are asking for too much and run the risk of losing a good buyer. They also know when you should counter and take a calculated risk. Whatever you do you need to do wholeheartedly. If you are going to counter, make sure it is at a number you really want. If you accept the offer you need to be comfortable with it and have no regrets.
There is no downside with receiving an offer, however bad it may appear. The first offer may not be exactly what you are looking for, but it can be too hard to reject.