There are many different ways that people and real estate agents approach selling a home in Australia, and one of the most debated issues is whether you accept or reject early offers from home buyers.
One school of thought is that if you get one good offer there’s a good chance that you’ll get another. The argument goes that until you’ve had a few people take interest and make serious enquiries, you don’t know the true value of your property. By accepting the first offer you’ll always wonder if you could have received more.
However, this is a very risky strategy and often you’ll find the bid is offered among the people that take interest at the start of your campaign. Turning down offers from the first couple of buyers in the hope of more money is a gamble and one that can have serious adverse effects later on.
Is selling early in the campaign a mistake?
Some real estate agents believe that it’s a risk to accept an early offer on a property because you haven’t got enough market data to know what a good price is. While agents will have a range in mind, this can change over the course of the property marketing campaign based on feedback from potential buyers. There are some real estate agents who believe you need to entertain a few offers before getting an idea of what the current market rate is for your property.
Let’s consider a house being sold at auction. Even though you’ve listed the home with an auction date in the advertising literature, people can make offers on the property right up to the day before. While there are times it makes sense to reject these offers, sometimes it can be in your best interest to accept the offer and cancel the auction.
Why people make early offers on homes
Regardless of how you have listed your property for sale, I find early offers encouraging. In my experience, it’s rarely a case that someone is trying to get the home under market value in the hope that you’re desperate to sell. In fact, that kind of interest generally comes when a property has been on the market for a long time.
Normally, early offers are an indication that the buyers are serious and ready to purchase a home. There are many reasons why buyers will submit an early offer. It might be that they’ve fallen in love with your property and have decided that they simply have to have it. They might be in a rush to move, perhaps because of a job offer or a new school term. Whatever the reason, their offer is likely to be what they deem attractive as they want to do what they can to secure the property, and not miss out.
Early interest also comes from buyers who have conducted their market research and feel comfortable on where the property sits with price. These may be people that have been in the market for some time, perhaps six month or longer and have missed out on several properties of your calibre. They’ll identify early that your property is great and look to put in their very best offer to secure the home before other buyers get a chance to make an offer.
When you do get offer on your property and you’re not sure whether it’s the best possible price, you don’t have to outright reject it. Your real estate agent is skilled in negotiation and will know ways to help push the buyer’s price to a point where you’re happy with it.
The benefit of selling early
If you can get a good price for your home straight away, there are benefits. It means you get your home sale over the line quickly, there are no more open homes inspections to endure and you can complete your purchase and move on to the next phase in your own life almost immediately.
Another good reason to sell quickly is that properties that stay on the market too long start to get a stigma attached to them. People begin to wonder why your property has been advertised for such a long time and conclude that there’s something wrong with it, and that no one else is interested. Many sellers are then forced to drop their sale price because of market perception, or take the property off the market and list several months or even a year later.
The moral of the story is that offers made by buyers in the first couple of weeks of your sales campaign are worth considering very seriously