HELP! We've
received an offer on our home...and it's WAY too low!
What do we do? I know that
you've heard that--I have and
here's what
I tell my Sellers:First, I have a story--ONE year ago, I had a buyer who made an Offer of $700K on a property that the sellers thought was simply TOO low because they had, one year prior to that, received an appraisal value at $775K. We knew that the price that we were offering was right but, they insisted that we were WAY too low and they would not respond to our Offer. Fast forward a year and a half and their home is still on the market and fair market price is now down to the point that the absolute HIGHEST that they can get on their home is $650K. Shoulda' Woulda' Coulda'-right?
Sellers, keep in mind that
your very first offer may not be exactly what
you were dreaming of--but, you simply must consider this offer.
Making a stiff or non-counteroffer is likely to have your
first and quite possibly only
buyers running for the hills! How long are you willing to let
your home languish on the market until the next, probably lower, offer
comes in--if, indeed one does?Sure, it's tempting to stand your ground and wait for that dream offer to come in but, consider the amount of time that your home has been on the market. If you're running into the 'months on the market' rather than 'days on the market' then you need to seriously consider that first offer. Don't be an ostrich and bury your head in the sand--you must understand the realities of the current market and how it is trending. Ask your agent to perform a market absorption analysis for you--these details can be eye opening for you and help you to realize that you should not be selling with emotions--this is a business decision. This first offer is certainly worth serious consideration.
Time on the market has an
impact on the buyer in ways which you, as a seller, may not be aware:
the longer the shelf life, the fewer potential buyers are
going to come through. Self
life erodes value just as your neighbors home selling at a
foreclosed amount does--especially
in a buyer's market!
Let me repeat that--especially
in a buyer's market!
Buyers begin to wonder, "What is wrong with the home that has
caused it not to sell?" What factors are keeping it from
selling? Is it price or is there something underlying that
others
have found before us? In nearly every neighborhood in our city we ARE in a buyer's market so, I highly recommend your taking a long, hard look at that first offer. If you don't consider this offer, how long will it be before you are able to garner another offer? How long are you willing to wait? How much lower are prices going to go before you do get another offer? How much more in mortgages are you going to pay before you finally Close on this home? What is this waiting period going to cost YOU in the long run?
There is an old rule-of-thumb in real estate that you should always consider your first offer, it's probably going to be your best offer. I can't think of a time that this old addage rings so powerfully truthful than in our current market. Don't let greed stand in your way of moving on with your life. Remember, you're going to come out better when you purchase your new home--you're going to be the buyer in a buyer's market!
About
the author:
Debe
Maxwell is a Charlotte
Residential Real Estate
Broker, Certified Neighborhood & Relocation Specialist, ABR
&
e-PRO who can assist you with the purchase and/or sale of real estate
in the Charlotte NC
Metro Area.
If you're relocating to or from any other area of the
country,
Debe connects you with any member of her team of relocation
professionals in your destination or exit city of choice. The
destination service is of no cost to you! The
Maxwell House Group's
quality service guarantee puts this team far ahead of the competition;
providing unsurpassed customer service is their #1 priority!
Debe
Maxwell -- Helen Adams Realty -- 704.491.3310Copyright©
2009 By Debe Maxwell, All Rights Reserved...**Shoulda'- Woulda' - Coulda''**
Disclaimer: All
information
provided by this author is strictly an opinion, is not guaranteed, may
be based on information collected from several sources, which may or
may not be deemed reliable at the time of researching this article and
may be time sensitive. This article previously posted on
WordPress.com site by same author.
After the show, let's go shopping
for Charlotte NC
homes
for sale!
(THE best Charlotte home search available - no kidding!)
Debe Maxwell, CRS/Realtor®/Broker
Broker@TheCharlotteScoop.com
Phone (704) 491-3310
It is so painfully true that the first offer continues to be the likely best offer! I've marveled at that several times over the past few years.
Great point - I am sorry your sellers are still sitting around!
Hi Debe, this is so painfully true. I love the way you have illustrated it all. By the way, we had well over 100 agents today in the training in Ballantyne, and I had your wonderful Blogs and Profil focused in my training presentation. I said "this is lady is amazing and is using blogs and Web 2.0 to the highest. And you have branded yourself with sincerety, grace and style as one of Charlotte's finest and most knowledable Realtors!"
Great advice and reminder to agents and sellers alike - I encouraged my clients to sell and pegged the value of the property at top dollar at $425,000. Still negotiating listing agrement - not signed. I received an unsolicited offer of $480,000 in June, 2008. Obtained 1 day showing agreement. Offer was rejected without a counteroffer. I listed property for sale in December, 2008. I received offer of $400,000. Accepted almost immediately. I guess they learned their lesson the hard way at a cost of $80,000.
Shoulda Woulds Coulda !! What a great title, Debe! I just hate to see sellers shoot themselves in the foot! Thanks for the great post!
Debe, pulling my head out of the sand I can honestly say that I wish I had this to print out for one of my sellers not too long ago. I brought them 4, count them, 4 written offers with the highest just not being good enough for them.
Their answer was..."well, we'll just live here forever if we can't get what we want" and Debe, they will be there for a very long time.
Great post
Deb
Hi Debe...It is always difficult for sellers to accept the reality of a down market although they understand a hot market very well. The tendency is to think their home is different. Unfortunately, if they are not motivated enough at the beginning the thought is that another offer will come along and be much better.
Very small chance that will happen.
Kate
Jeff: Ironically, I wrote this early this morning and didn't have any photos/clipart to go with it so, I set it aside. Low and behold, this afternoon, I had this VERY thing happen to me! And, for the life of me, I can't convince my sellers that unless they want to live in this home for SEVERAL years, they need to bite the bullet now and be on the winning side when they purchase their new home! It's just hard to swallow a loss on the sale of a home after so many years of garnering unbeliveable profits!
Lise: They won't be for long--either they'll accept or they'll be staying right where they are for a few years!
Lynn: Well, thank you so much! I wondered how your class went and I really do appreciate the kudos to your class the the oh-so-kind words from you! YOU are so sweet and I wish you nothing but, the best at your new firm. I'm sure you're going to rock-n-roll with Wilkinson! Keep in touch...
Ryan: What is so bothersome is that I am probably the most soft-hearted person and I am able to separate emotion from business when it comes to negotiating--SO, WHY CAN'T MY SELLERS!! I feel like a nag when I just keep saying, this is a business transaction and here is the PROOF that you need to react to this offer and react NOW because there are 10 other homes out there that those buyers can turn to if you DON'T accept or even counter to some degree. ARRGH!
Mary: Well, thank you! Funny that you should say that--I wrote this post early this morning--didn't have photos and put it on the back burner until I finished with some other business today. Then, I got an offer on one of my listings and sent it to my sellers and started the discussions with them. They were offended by the low (10% less than list price) offer and I continued to explain to them...yada, yada, yada! Well, during all of this I said to my partner, "One of these days they're going to say, 'Shoulda..." When I came back to my post to add clipart, I thought I'd change the title to that!
You probably didn't need to know all of that--I'm still stressed from the day's negotiations--with my own SELLER! ;-)
Hi Deb! You go right ahead and print it for your clients anytime you want--I know it won't help the ones in the past (unless they're still listed!) but, feel free! I actually am thinking about adding this to all of my listing presentations--some people just don't WANT to hear but, they NEED to do so in order to save themselves from massive losses in their investment.
Hi Kate! I think you're right--if you don't 'feel' the motivation initially, it 'ain't gonna happen'! I'm going with my GUT from now on too! LOL
Debe - I just had something similar with buyers I was working with. They put in a fair offer on a home that had been on the market off and on for over the past 18 months. It was a very nice home and I knew that the reason it wasn't selling was because of the list price. After looking at the most recent comps my clients submitted their offer and lo and behold the sellers countered back with $900 off the list price. My clients would have been more than willing to negotiate with the seller if they had come back with a more reasonable counter. They said bye bye to that seller and we found them another home this week.
Debe!! HAHAHAHA!! Making this part of your listing package is a terrific idea! I'm sorry your sellers stressed you out today! Tomorrow will be a better day :-)
Debe, the market is always shifting and sometimes it is scary what it is telling you.
great post - now is not the time to be greedy if you are a seller - take the buyer and move on
Hi Donna! I know your buyer--I've had one just like yours!! In this market, you just never know when the next offer is coming--or if it even IS coming!
Hi Mary!: Especially now, right?! Hey, I'm much better this morning!!
Hi Gary! Yes it is and if you don't follow it closely enough, you're going to lose out on a shift too!
There is a home we have a buyer interested in Ann Arbor. It was originally listed at 399K, now at 325. They had an offer in 2006 of 350K and would not come down. I called the listing agent and he told me what had occured. Then they started chasing the market down.
They will be lucky to get 299K.
Yes the first offer is many times the best.
Good job! Let's not forget about the monthly carrying costs they'll incur as their home idles on the market.
Hi Debe:
Exactly! I have three of those scenarios with listings right now. The sellers are kicking themselves for not accepting an offer 1-1/2 years ago...
Sellers need to seriously look at any offer right now.
Debe, So very well said and I think that many sellers are finally coming around to face facts and do what is in their own best interest.
Wonderful advice Debe. Too often the inflexible seller ends up stuck with a problem down the road.
More often than not the 1st offer is the best offer. There have been studies done over the years that prove this to be true. We all know there is a direct correlation between days on the market and the sale price. It just makes sense if you get an offer in the 1st few months it will be better than another one 3 or 4 months down the road, especially in a buyers market.
Debe - I would love to print out your post and show it to a couple of folks. But, then again, I'm sure they would think it referred to everyone but them .... oh well.
You are dead on with this post though. People need to take their emotions and pack them up in a box. Then put that box in a storage shed somewhere.
Missy: They woulda' shoulda' coulda' huh?! Funny but, I am forever questioning why the listing agents don't educate their sellers better. Well, now that the shoes are on my feet on a transaction that I'm currently working, I'm actually negotiating MORE with my Sellers than with the buyer's agent! I absolutely cannot convince them with statistics, facts or begging and pleading!
Kim: You're absolutely right--oftentimes that is forgotten!
Toula: That's exactly right! Why don't they see that is what's happening all around them and instead of being stubborn, make it happen NOW--when they purchase, they're going to be in the driver's seat and get a heck of a deal!
Barb: The sellers that I'm dealing with today think that this is all in the OTHER party's interest! No matter how hard I try, I'm having trouble convincing these guys!
Paddy: Yep! Can you say 'short sale?'
Bill: You're right--I think that in this market, those studies would prove to be 100% accurate! (okay, well perhaps those who make those 50% ridiculous offers would cause a drop in the stat)! Believe it or not, I actually prayed last night that after people started commenting here that my sellers would read this!! Hey, I have nothing to hide and if it helps save them tens of thousands of dollars... ;-)
Carol: You go right ahead but, you're right--the BEST sign that they think it's about everyone but, them is when they say, "But, this is a great HOME and we just LOVE it here and we're not going to let it go so cheap!" When they use the words 'home' and 'love' it's emotional!
Debe,
Thanks for the great post. You make some great points that I will keep in mind. You are always full of som much helpful infor...THANKS
Hi Lori! Thank you and hopefully it'll help one of your sellers too!
Ah yes, the woulda coulda shouldas ... unfortunately I see many of them. Some pass up the first offer, then regret it, some pass up locking in a mortgage rate, then regret it - always a shame when hindsight kicks in. Nicely put, hopefully we can help educate clients to not miss the boat so much.
Happy Valentines Day Debe !!
Cheers !
Sheldon :o)
Hi Sheldon! I just had a conversation with a seller tonight who said that yes, he turned down his first offer and now he regrets it. It is so sad to hear this but, you just never know--although right now, I tend to think that the first offer IS most likely the best!
Happy Valentine's Day to you too!
Debe This is an awesome post and I think it is extremely important for sellers to know this information and the potential money they coud lose! Happy Valentines Day and Congrats your post was selected for the Blogger's Choice Selections!
Hi Midori! Well, thank you SO much! I needed to 'feel the love' today!! ;-) It just so happens that I wrote this post Thursday morning and low and behold, I had a similar incident happen with an offer that afternoon--before I got clipart added to the post! I think I jinxed myself writing it, huh?!
Happy Valentine's Day to you too and thanks again Midori!
Nice post. I'll have to remember the first offer is the best trick.
It is a great post! I agree with you. Where do you find those cute clip arts. It is adorable. I love them.
Grace Keng, Silicon Valley Realtor
Frankly I am a little bit surprised that you had so few comments from this blog. It was the best one I have seen with regards to why a seller should always, always respond. It is our job to try and take the emotional side of the equation out of the deal, and get our sellers thinking in a rational way.
It works both ways. When our business was booming we had to convince buyers to make offers at list or higher, now we have to convince sellers to look at all offers.
The emotional side of the equation kills more deals than anything.
Nice job.
This post was pointed out to me by Charlie Fraser. I am so glad he did!
Only two months tardy responding to this post but, I do thank you all for your comments! And, thanks to you Charlie for passing this on to Cherimie--I appreciated the 'recommendation!'
Have a great week all!