If you’re working with a realtor, you’ll probably hear them tell you that the first offer on your home is the best offer. Most of the time, your realtor’s mantra is going to prove correct. But before you sign all the t’s and dot the i’s, you’ll want to consider some key areas.
Why Your First Offer Might Be The Best One
You got the call you’ve been waiting for.
Your realtor has received the first offer on your house.
While you’ve been working with the realtor, they may have told you that your first offer is going to be your best one.
They likely have accurate data and experience to back that up.
If you ask your realtor, they probably have a laundry list of cases where their seller didn’t take a first offer and ended up accepting a lower amount later because they waited.
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How Long Has Your Home Been Listed?
The length of time your house has been on the market is something buyers take into consideration when shopping around.
If a house sits on the market for too long, they start to wonder what’s wrong.
Why hasn’t it sold yet? Is it priced too high? Is it outdated or in disrepair? Is there something else wrong with it?
All of these red lights that go off in their heads might deter them from even getting a closer look at your property.
Bottom line, your house will be harder to sell if it’s on the market for too long.
Is It Close To Winter?
The real estate market tends to slow down during the winter months.
Anything from Thanksgiving to New Year’s is typically known as a dead spot for sales.
Think About the Buyers
If you get your first offer relatively soon after you list your home, it’s likely that the potential buyers are serious.
They saw your home come on, they went to that first open house, and they’re wanting to swoop in before anybody else does.
Buyers in general will usually offer lower than what they are willing to pay as their first dollar amount.
Remember that the amount on the offer is not set in stone.
They wouldn’t have put an offer down unless they were serious.
You could still negotiate and possibly end up in a great place.
Some signs that you have a serious buyer include:
- Pre-Approval Letter From Lender – A pre-approval letter means they are serious about purchasing. They’ve spent the time to get the approval and are actively looking.
- A Decent Down-Payment – A good sized down payment indicates a buyer’s investment in their offer and their readiness to purchase.
- Working With A Reputable Local Agent – If their real estate agent is well known in your area, you can rest assured that your buyers are serious. A well experienced agent will not waste your time with an offer that is just a whim.
- Not A Lot Of Contingencies – Too many contingencies make it easier for buyers to walk away from a deal. If they are serious, they’ll want to make things as easy as possible within reason.
- A Personalized Touch – sometimes if a buyer is really serious about a property, they might include a letter telling you why your house is perfect for them and their family.
What Else Should You Consider When Debating That First Offer?
If you’re still unconvinced, here are some other things to consider when you’re trying to decide to accept or wait it out.
What’s Their Price?
Unless you’ve hit a sellers market and have a magic mix of factors working for you that end up in a bidding war, you’re probably not going to get your asking price when you do get your sell.
Remember these two things:
- Don’t let your emotions get in the way – This house was likely your home and you have memories attached to it. While it’s hard, try not to let emotions get the best of you when entertaining an offer. If the first offer comes in at an amount lower than you expected it would, take a deep breath and don’t let it offend you.
- 10% – 15% – If the first offer is within 10% – 15%, you should seriously consider it.
How Quirky Are Your Digs?
Is your home’s decor not for everyone? Do you live in an area full of two story family homes with large yards and yours is a ranch plopped in between?
If your home has factors that are going to appeal to a specific buyer, you might want to jump at a decent offer.
Are They Offering Cash?
Offers from buyers paying cash by far and large mean a faster closing.
Buyers using lenders have to go through sometimes lengthy processes to have their loan approved.
Even pre-approved buyers could have issues arise with their approval status during the process.
If someone is offering cash and you accept, you’ll be signing on that dotted line before you know it!
What Else Should You Consider?
- Have You Already Found A New Home?
Unless you had the home that you’re selling paid off, if you’ve already found a new home, that means you’re paying two mortgages.
In addition to that, double utility bills and two lawns to mow.
If you don’t have endless funds, you should think about how long you really want to be responsible for the upkeep and price of two properties.
- Do You Have A Deadline To Meet?
You might need the sale to happen quickly for any number of reasons.
If you need to have your home sell within a certain amount of time, that first offer could mean the difference between meeting your deadline or not.
- A Home Similar To Yours Sold For Less
If there is a home in your area that is similar to yours that recently sold for less than the offer you just got, it would be unwise to ignore it.
Comps, or homes in your area that recently sold that are similar to yours, help to determine your home’s market value.
If a comp just sold for less, it can affect your market value in a negative way.
When Should You Not Accept A First Offer?
Many things can make an offer bad, but some of the things that could be deal breakers are:
- Unreasonable Price – If the offered amount is way below your home’s market value, obviously you’ll want to reject it.
- Seller’s Market – If you’re in a seller’s market that means it’s quite possible you will receive multiple offers on your home. Listen to your realtor’s advice here. They’ll know when to expect this.
- You Just Listed Yesterday – If your listing is brand new, you might consider waiting it out just a little longer, unless that deal is so sweet you can’t pass it up.
- Too Many Contingencies – If the offer contains too many contingencies, it could be a sign that the buyer isn’t serious. Or they might just be picky. It could be any number of things. Your realtor can communicate with the buyer’s realtor to test the waters and find out what is really going on. But if they insist on a long list of contingencies, it might be best to wait for the next interested party to come along.
Conclusion
While there are some cases where you should walk away from a first offer, thinking about the pros and cons of waiting for that next spark of interest is important before making the decision to reject it.
Listen to your realtor.
If they’re urging you to accept a first offer, it’s not because they want to get their commission and move on.
Their training helps them look out for your best interests and they want to get you a good deal!