If you’ve ever sold a home, you’ve probably heard the saying, “The first offer you receive is always your best offer.” It’s a tenet that rings true – except when it doesn’t.
“If you’ve checked comps and you’ve priced your property well, your first offer may very well be your best offer,” said Nikki Beauchamp, Licensed real estate salesperson for Engel & Völkers New York Real Estate. “Of course, you may get six offers that first week and then you’ll have to consider not just the price but also the terms of each offer.
“I always encourage sellers to have a conversation with anyone who puts in an early offer to see if we can get to a price that’s acceptable to both parties,” she said.
Consequence of Waiting
Sellers who choose to turn down early offers need to be at peace with the notion that it could be weeks or even months before another offer comes in. During that time, the monthly expenses of holding onto the property can really add up and the delay may hinder your ability to move to a new place.
“I have buyers who just submitted an offer on a property they saw six months ago,” says Beauchamp. “Turns out the seller had an offer but he wasn’t willing to negotiate with that buyer. The seller had to reduce his price and now, all these months later, he’s accepting basically the same offer he originally turned down.”
Of course every real estate transaction is different and situations vary greatly depending upon which segment of the market you’re in.
New York’s ultra-luxury segment, for example, is seeing an oversupply of units. When a condo doesn’t sell after six or seven months, it’s not unheard of for a seller to slash the price by 20 percent or more. In a segment where properties cost $10 million to $20 million, the buyer pool is limited and your first offer may also be your only offer.
When it comes to properties under $3 million, sellers often get multiple offers within the first few days on the market. In this situation, the best offer may still be found within that initial pool – or it may be that those first offers ignite a bidding war.
“In that first-time home buyer segment, there may be literally dozens of people vying for the same apartment,” says Beauchamp. “If that’s what you’ve got to sell, you’re likely in the driver’s seat in terms of price and terms. Just remember that negotiating with buyers while your property is new on the market and a hot commodity, is probably still in your best interest. Wait too long, and some of that interest may fall off.”
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