We’re in agreement that the local market has seen all its biggest price gains.
You’ve patiently waited until there were a couple of good comps nearby, and you’ve agreed to list for an attractive price – within 5% of the last sale. You’ve spruced up the home, and are ready to hit the open market.
You understand the logic about taking advantage of the urgency early on, but you don’t have to sell – and you’re not going to give it away!
How will you know?
Here is my Giveaway Meter:
1. Multiple offers the first couple of days: You hit the jackpot, and it was probably more due to your home’s higher quality and lack of good inventory nearby, rather than you under-pricing your home. Don’t panic, and don’t raise your price. Thankfully, you have hired an agent who has legitimate bidding-war strategies – let him do his thing! P.S. Spreading the offers out on the table is not a bidding-war strategy – though it is the standard answer when you talk to realtors.
2. One offer the first couple of days: Drag your feet to see if anything else comes in – and threats of offers don’t count, unless they come from a great agent who might deliver. Wait until the offer is about to expire, and counter-offer to buy three more days.
3. Offer comes in on Day Four: The fourth day is peak urgency – if the offer is full-price or better and the other terms are acceptable, sign it. Sellers and agents are highly resistant to not countering – but if you get your price, don’t rock the boat. Three thoughts:
a. You have a second negotiation coming over repair requests, and buyers who get worked over in the beginning are more likely to exact their revenge after the home inspection.
b. Buyer’s remorse starts setting in the minute a buyer signs a full-price offer, and they get indignant if you don’t agree. They might walk out over the smallest counter-offer, so don’t risk it if the price is right.
c. Happy buyers are more likely to close escrow.
4. Offers After Day Four: Tread carefully, because your urgency is completely drained by Day Seven. You’re not giving it away, and appreciate that you have properly tested the market.
5. You don’t get any offers: Lower your price 5% to keep the urgency higher. After 30 days on the market, buyers will already be pricing in a 5% to 10% wrong-price factor, so you might as well stay ahead of them.
You can spend a million dollars on advertising and do open house every day, but if the price isn’t right, the home won’t sell. Once you have accepted that fact, and realize that you and your agent are conducting a search for what the market will bear, use the Giveaway Meter to guide you. Yes, there is always a chance for a lucky sale, but if you go that route, you should list in short spurts (1-2 months) so buyers won’t see a long stretch of failed listing period on your record.