It is often said that the first offer you receive when selling a home is likely to be the best offer you’ll receive. Yet, experience shows this is not necessarily so.
Recently a home seller in the Oakland Hills in Northern California received a low offer soon after he put his home on the market. The buyer liked the property, but he felt that he needed to make a lot of changes to make the house suit his needs. This was reflected in his low price.
The seller countered the offer with a price and terms he could live with. The buyer backed out of the negotiation, which was fine with the seller because he wasn’t enthusiastic about selling for less than his list price. A couple of weeks later, he received a full price offer from buyers who loved the property as it was, and a sale was made.
Another seller received an offer from a buyer who was hoping for a huge price concession. Not only were the price and terms unacceptable to the seller, but also the buyers hadn’t done their homework. They hadn’t bothered to review the seller’s disclosure package. Their agent, who was from out-of-area and was not know by the listing agent, simply faxed the offer to the listing agent with no advance warning. This created the impression that the buyers were less than sincere. The seller didn’t even bother to respond to this offer.
The next offer this seller received was approximately 20 percent higher than the first offer. The buyer provided a pre-approval letter, and had read the seller’s disclosures. The buyer’s agent met with the seller’s agent to discuss the offer and answer any questions. This offer was worthy of a counteroffer even though it was also for less than the listing price.
HOME SELLER TIP: In general, it’s wise to counter any offer from a well-qualified buyer, even if it’s for less than the asking price. Some sellers don’t want to waste their time with an offer that looks like it’s going nowhere. They’d prefer to send a verbal message that the offer isn’t good enough.
Verbal negotiations can bare fruit. However, verbal agreements to sell real estate are not binding. So if you do come to a verbal agreement, put it in writing before someone has a change of heart.
Occasionally, sellers are so insulted by a low offer that they refuse to negotiate at all. Unless the buyer’s agent tells you that the offer is the best the buyer can do, look at it as a starting point.
If the offer is unreasonably low, a good strategy is to yield little. This sends a message to the buyers that they will have to do a lot better if they hope to buy your home. On the other hand, you might agree to split the difference between the buyer’s price and yours if the offer is good and one you’d like to work with. Finally, a counter at the asking price wouldn’t be out of line if the buyer made an absurdly low offer.
It can be risky to wait for a better offer. In a cooling market, you could receive even lower offers over time. However, if the market is strengthening, your chances may improve with time. Before you decide to hold out for a higher offer, ask your agent to give you an update on current market conditions.
THE CLOSING: In most cases, it’s wise to work with the offer you have on the table until you’re sure there’s no way to make a deal.
Dian Hymer is author of “House Hunting, The Take-Along Workbook for Home Buyers,” and “Starting Out, The Complete Home Buyer’s Guide,” Chronicle Books.
What’s your opinion? Send your Letter to the Editor to firstname.lastname@example.org.