Deciding whether to accept or decline an offer can be the most challenging of times for owners. There is no rule book to follow on how to play the offer scenario when it arises. Receiving an offer is good news when selling as it means there is interest in your home. But no one wants to undersell either. It leads back to a simple question with a complicated answer – how do we extract the best price without losing the buyer?
Whilst there are no certainties in a real estate negotiation, there are some principles that will help guide you through the process.
What does the recent sales evidence suggest? As the seller, you may have a target number in mind, however how does that number compare with comparable recent sales? Does the offer seem fair, high or low?
Once you have established this very simple rating on the offer at hand, you will have a clearer view on how to handle the negotiation. Never base your response to an offer on the asking prices/price guides of other unsold listings. Always use recent comparable sales on which to base your response to an offer. The most painful offer to accept is the one that is lower than the offer you previously rejected. Remaining calm, logical and unemotional during a negotiation is crucial to making the right call.
many sellers ask hypothetical questions prior to the home going on the market.
Questions such as ‘What should we do if someone offers $1,000,000?’ or ‘What do we do if we get an offer in the first week?’
It’s natural that the seller poses these questions, but they can only be answered in context of the campaign.
An offer should rarely be judged against time on market. The digital age has made marketing real estate an almost instant process. An offer should be judged against the feedback of other potential buyer’s feedback and interest. If the first buyer on the first day makes an offer on your home, yes, this can be a very tricky situation. make no mistake, it quite often happens this way.
The bottom line is, you cannot plan in advance on how to play the actual offer. The offer needs to be handled in the context of the campaign. This is where the success of the campaign will often rise or fall on the agent’s negotiation ability.
There are three basic formats in which an offer can be made. Verbal, written and contractural. By law, real estate agents must disclose all offers to the sellers. Whenever an offer is made, it’s worth remembering that verbal and written offers are non-binding. Only a signed contract with a deposit cheque can be considered truly genuine.
If you accept a verbal or written offer that crashes, it’s best to consider it a non-offer going forward to avoid making mistakes when assessing future offers. Be wary of the high verbal offer – easy come, easy go!