5 Times to Accept the First Offer on Your House
Bidding wars can be exciting but don't always happen, and often the first offer is the best one you'll get.
Consider timing and convenience when deciding if the first offer is right for you.(Getty Images)
Living in a hot neighborhood can give you a big head when it comes to your property value. Especially if you’ve spent the last couple years watching neighbors sell their houses for continuously climbing prices, when you’re finally ready to put your home on the market you’re likely expecting to sell at the top of the range, if not the record price so far.
Before you test the waters with your home, vowing only to consider offers that meet your (admittedly high) expectations, take a deep breath. A home sale that meets your needs isn’t just about the final sale price on paper – it's also about the contingencies and details that ultimately make the deal a success for everyone involved.
In many cases, the offer that gets you to a sale will be the first one you receive.
Especially when you’re living in a popular and fast real estate market, a good – but not amazing – first offer may make you consider waiting to see what other buyers may be out there. Holding off could lead you to a great offer, but it could also backfire.
It’s important to keep perspective on any interest you get from a potential buyer, and also keep in mind that everything is up for discussion. “There’s always negotiations and countering back and forth,” says Patrick O’Connor, a real estate agent with Premier Sotheby’s International Realty in Naples, Florida.
Even if the first offer you receive isn’t the price you were hoping for, you can easily make a counteroffer or negotiate for other details – like skipping an inspection or allowing you more time to move out – that can make the deal the right one for you.
Here are five scenarios where the first offer is the one you’ll want to accept.
When the timing is right. Timing is everything in real estate, and if your home is on the market too long, people will assume there’s something wrong with it. Even if it was simply a matter of asking too much at first, it’s hard to stir up interest when the "for sale" sign is just sitting in the front yard for weeks.
“The first three weeks is usually the most active that property will have,” O’Connor says. Beyond that, you’ll likely start to see dwindling interest.
If you get an offer in the early days of putting your home on the market, it’s important to consider it because playing the waiting game easily backfires once the listing is deemed older.
To take advantage of the first weeks on market, strategize with your real estate agent about the best time of year to list. While the time period from Thanksgiving through the New Year's is typically pretty dead in terms of real estate activity, you can put your home on the market when buyers jump back in at the beginning of January.
“You get that appreciation boost after the first of the year,” says Lennox Scott, chairman and CEO of John L. Scott Real Estate in Bellevue, Washington.
Even with more buyers actively shopping, don’t take your first interested buyers lightly, as there will likely be fewer who show interest in your home as time goes by.
When it’s a cash offer. The highest price isn’t necessarily the best deal, but a cash offer can make for a much smoother transaction.
“If you have a cash offer, that means there’s one less contingency,” O’Connor says. He recalls a recent deal where the buyer made an all-cash offer contingent only on inspection – no appraisal and no waiting for lender approval on the buyer or property. Closing dates can be moved up much easier with a cash purchase.
When you’ve got a limited buyer pool. It may be that your property is valued particularly high or maybe it’s got a unique curb appeal, with a brightly colored exterior or bamboo plants out front, but homes that don’t appeal to the general public can be trickier to sell.
“Sometimes when you sell a quirky house or a contemporary house, your buyer pool goes down,” says Mark Parrish, a luxury real estate agent in the Minneapolis–St. Paul area.
With a smaller overall group of buyers to start from, there’s a good chance offers will be few and far between. For the sake of the sale price, the first offer you get will likely be your best bet.
How to Sell Your Home When the Company Leaves Town
When you’re pressed for time. Moves come about for a variety of reasons, and sometimes they’re out of your control. If you have to relocate to a new city or state for work, it’s much easier when you’re able to reduce the amount of time you have to pay for living expenses at two homes.
For families in particular, O’Connor says selling the property quickly is a priority. He says it’s fairly common for one spouse to move first for work, while the other spouse and kids remain behind while the property is on the market,.
“You want to get that family together as quickly as possible – that’s very stressful on the family,” O’Connor says.
You may also need to move quickly for financial reasons. If your job situation has changed and you’re now making less, relieving yourself from pricey mortgage payments will be a big relief. Communicate your motivations for the move to your real estate agent. He or she should be able to market the property to secure the best price possible quickly, while also keeping an eye out for offers that don’t seem serious to avoid the potential for a deal that falls through.
When you’ve already found your next home. Sometimes it’s a strain to pay two mortgages at once, and other times it’s financially impossible. You certainly don’t have to accept a low-ball offer simply to get a house off your hands, but that first offer shouldn’t be anything you scoff at.
Even when you are financially able to purchase a second property and move prior to selling, O’Connor points out that a vacant home has its own difficulties. “When a house sits empty, things happen to it,” O’Connor says, alluding to heating problems, burst pipes and break-ins that can go unnoticed when no one’s living at the residence.
If you do move prior to selling, O’Connor recommends bringing in a professional stager to help potential buyers picture the space with furnishings.
When you do receive an offer, consider all the contingencies involved, and ask your agent if there are any red flags. If the buyer isn’t preapproved by a lender, for example, there’s a greater chance the deal could fail. Your local multiple listing service will still note the previous days on market, which immediately makes your property appear less desirable as buyers wonder why it's been available for so long.
But red flags aside, don’t get greedy about offers or compare your home to other houses that sold on your street. After all, it takes is one offer to sell a home.