When I got into real estate, 22+ years ago, the old-timers would always tell me, “the first offer you get on a listing will usually be the best offer.” In reality, I think what they meant to tell me was that the first offer would likely come from the most interested buyer. Right now, in this incredibly uncertain market, I believe that old adage to be truer than true!
There is so much inventory out there right now. Each seller needs to carefully weigh the benefit of having a SOLD home vs. trying to wait on the next buyer. Guess what? None of us truly knows when the next buyer, with money, might show up! Within the last 6 months I had a listing that was listed at $398K. It was vacant and the seller had moved on and purchased another home. SO… this seller was paying two mortgages. We had a buyer who brought a low offer and eventually he came up to a price of $360K. I encouraged my seller to take it!! It was fall, winter was around the corner, and there were other homes in the subdivision that were available. If we didn’t take this joker, one of the other sellers would. And they did! My seller turned down the offer, the buyer bought the home down the street for way less money, and whammo! We had another comp in the neighborhood that was lower in price than ours was!! An appraisal nightmare….The seller ended up carrying that house all winter and closing on it in March, for $332,500!! Another compelling tale would be this one: I saw a home get re-listed in the MLS today for $829,000. This is a property that has been on the market off and on since November of 2007!!! YEP! It started out at an exceptionally unrealistic price of $1,900,000. When the market started its’ record setting downward spiral, the price started dropping. At some point, it went into foreclosure. When I wrote an offer on it over 18 months ago, my client offered $900,000!!!! At that time it was in “short sale” status and some very intelligent banker made the executive decision not to take our offer. (I forgot to mention here that the home had LIVE termites in it, and the basement was leaking like a sieve all 3 times my buyer looked at it!) So, here it is, over a year and a half later, listed for $829,900. When I quickly add up the carrying costs of that particular property, it just blows my mind. The bank had to pay the real estate taxes for the last couple years, utility bills to keep pipes from bursting, attorney fees to foreclose etc, etc, etc. I am guessing that Mr. Banker now wishes he had taken our offer and ran far, far away with it in order to stop the bleeding.
So now that I am an “old timer,” I find myself counseling the agents in my office, and my sellers, on the merits of getting an offer on a listing. Buyers just are not making emotional purchases anymore! They want to have bragging rights, and they have more choices than ever before. If your home is on the market, and you are fortunate enough to have a buyer who has picked your home out of the plethora of choices in front of him, you better weigh the pros and cons very carefully. It could be months before you see another offer on your property. Call me if you are in a jam and I will give you my sound advice!
Until next time,