Why the first offer is (usually) the best offer
Of course, you would expect an estate agent to endorse a cliche, they find a good cliche difficult to resist. After all, how many buyers have heard their agent deliver the mantra ¨location, location, location¨ at the appropriate moment and with yogi solemnity. When it comes to sellers we also have a favourite mantra which is, why the first offer is always the best offer.
Imagine the situation, you have just put your beautiful home on the market and within one week a buyer comes along and offers you a price close enough to your asking price to make you seriously pause for thought. Hereafter there are three possible outcomes:
Outcome A: After some negotiation, you accept the offer.
Outcome B: After some negotiation, you reject the offer as being too low and continue to market the property, after all you have only been on the market one week. Eventually, you sell to the same or another buyer for a better price.
Outcome C: After some negotiation, you reject the offer. Some months later you ask your agent if the original buyer is still interested only to find they have purchased elsewhere, eventually you reduce your price and sell for less than the original offer.
In such a situation how can you be sure what to decide? In my experience accepting the first offer as the best offer is more often than not the best course of action, however with the caveat that a lot depends on the status of the buyer. Some investigation into your buyer can often help you make the correct decision. How long has the buyer been looking? Do they know the area? Have they made offers on other properties in the area?
If your buyer has been looking for some time, knows the area and has in fact made offers on other properties they probably know the property market at least as well as you and the agent advising you. You should take such a buyer very seriously as probably their offer is on the money. Whilst a novice or very keen buyer can pay over the odds, generally speaking, this is not something to expect, especially if you don’t find yourself in a seller’s market. So be glad if you receive an early offer from a seasoned buyer that is close to the asking price, negotiate well and you may just be able to raise it a little and realise every home vendor’s dream – to sell quickly and for a good price.
Whichever you decide, bear in mind that time on the market erodes value, so the longer a property is listed for sale, the less interested buyers and agents become. People will begin to wonder what is wrong with the property or assume it is simply overpriced. When you put your property up for sale you hope that there will be a response from the market, with enquiries coming in and people keen to view the home. There is no way of knowing beforehand just how long it will take to sell your property; a lot depends on the economic climate, the strength of the property market and the prevailing popularity of the area the property finds itself in, as well as the architectural style. However, the general rule of thumb is that the more expensive and large a property, the longer it will take, so the sale of a grand estate can take several years while a smaller apartment may just be on the market for several weeks or months. As sellers in the Costa del Sol know only too well, selling takes time, not because the market is rubbish but because this is typical of a holiday home market. You are selling a luxury item something most people do not need but some are fortunate enough to be able to afford, a second home. And buyers, just remember….it’s all about location, location, location…
By Adam Neale | Property News | January 22nd, 2020