There is a truism in real estate that the first offer you receive on your home is the best one you will get. And while that's not true 100% of the time, our experience is that it IS true in about 85% of cases.
When a North Shore homeowner receives the first offer on their home and it isn't close to their asking price, they tend to balk. Reluctant to even negotiate, their inclination is to hold out for another, higher offer.
While this is understandable, in most cases we encourage our clients to take a deep breath and try to work with the offer, reminding them that it's not where you start in a negotiation but where you finish that counts. We have seen a lot of cases where the initial offer was low but ultimately got close to what was acceptable to the seller. There is absolutely no downside to countering an offer, even if it's a small reduction. That signals to the buyer that you are willing to negotiate but are not willing to give away the farm. And the buyer's response to your counter will give you a good sense of where things are headed.
But back to the reason that the first offer is often the best one.
Today more than 90% of all home buyers start their home search online. They supplement their online search with visits to Sunday open houses. By the time they are ready to make an offer on a house, they are well-educated about the market. They have looked at everything in their price range, comparing features and amenities and have a good sense of value. When a new house comes on the market, they can immediately assess how it compares to what they've seen and whether it's worth the price. Their offer will reflect their perception of the home's value vs. competing listings.
If they have lost a house (or houses) in a bidding war, they will move quickly and with a strong offer.
But once a house has been on the market for few weeks, most of the showings you get will be from buyers who are in the early stages of their search. They are still doing research on the market and not yet ready to buy.
The longer the house is on the market the less sense of urgency buyers have. They think, "Well, no one has bought this house, so it must not be worth what the seller is asking." or they think, "Maybe there's something wrong with it." or even "Maybe I can get this house at a steal." And that's when the low-ball offers start to come in.
The more time that passes, the more likely you will end up accepting an offer that is lower than the initial offer you got.
My advice is to take the first offer you get seriously. Don't be insulted by it. Try to work with it. You may be able to get the buyer to come close to a price that is acceptable to you, especially if you can compromise on other terms like the closing date. Don't walk away from the deal until you have fully negotiated it. When you reach the buyer's bottom line, you can decide if it's acceptable or not. No one can force you to take it.
We are North Shore real estate specialists and one of the top teams in the area. If you would like to schedule a buyer or seller consultation with the Come Home North Shore team, please call 847-881-6657 or send us a note here.