Zillow and other internet tools are helping to generate maximum urgency early in the listing period.
But the industry doesn’t do a great job of educating – and sellers can be surprised to see a rush of people right away, and an offer or two in the first few days on the market. There is a temptation to wait for the two in the bush.
There is an old adage that the first offer is the best offer. But that sounds like sales talk, and is easy to shrug off – it makes it sound like you have to accept the first offer, but even the most motivated buyer wants a deal and will offer less than they might pay.
Let’s change it to the first BUYER is probably the best BUYER.
Sellers should recognize that anyone who makes an offer in the first day or two of the listing must be on high alert, and is ready to buy. They have probably made offers on others, and lost out or couldn’t come to terms. Frustration is creeping in, and they want to get it done – these are the folks who have the highest motivation, and willingness to pay top dollar.
Here are some qualifiers:
- Timing is the key. If the market is hot and prices are trending higher, then it might get better, later. But San Diego’s pricing trend today can be described as flat-to-slowly-rising.
- Is it a clean offer? Be cautious about offers that are contingent upon selling another property, or have other complications. They are worth considering, but drag your feet for a day or two to see if anything better comes along.
- The motivated buyers have been in the game for a while, and have seen the comps. They will pay a fair price, or maybe a little more. If your house is super spectacular, then a higher bidder might come along later – those are the houses that are the hardest to find. But if yours is a regular offering or has any negatives, get it done early while you have urgency on your side!
- Does the buyer’s agent have experience getting people to the finish line? Zillow has their sales history for the last 12 months, and a good agent should have at least one sale per month.
- Does the escrow period give you sufficient time to pack, move, and fumigate your house if needed? Get a termite report before committing to a specific exit date.
- Can the lender perform within the scheduled timelines?
- Have all the decision-makers seen the house?
- Do you have a place to go? Buying is harder than selling – make sure you have a clear and reasonable exit plan. The packing of your belongings usually takes twice as long as you expect. Don’t put it off!
While ‘the market’ seems as hot as ever, any neighborhood can hit a dry patch. Appreciate your good fortune, and make the deal.
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One aspect of first offer/best offer that is often overlooked is the time value of paying 2 or 3 fewer mortgage payments. My neighbor just went pending for a price that would have sparked a frenzied bidding war some 900 days ago when first listed.