Home sale strategy: set a date for offers, or not?
You have prepared carefully for the big day when your property goes on the
market;
first it goes on MLS, then you
have a Realtor tour, and an open house during the week end. The critical “exposure”
time has started, a full marketing campaign is in place, with paper advertising
and internet advertising - the world is starting to learn about your house.
Should you hold off for offers until a certain date (hoping for multiple
offers), or do you take offers as they come?
Holding off for offers is a good strategy,
if the house is well priced:
it ensures that the house has been seen enough, and that potential buyers have
had the time to decide what they want to do, and look at all the disclosures
and reports your agent carefully helped you prepare upfront. When offers
are reviewed, chances are they are well thought out, and you have a choice
between solid offers. Odds are higher the transaction will close without
problems.
But the down side of this strategy is that some buyers are turned off by the
process, and do not want to participate in a competition. Also, if
you hold off too long, other competing properties will come on the market and
you will lose some potential buyers. Finally, with this strategy comes
the difficult choice to make if a “preemptive offer” is presented to you, often
higher than the asking price. If you take it you will never know what the
other offers could have been (the ones that followed your instructions and
waited for the “offer date”). If you do not take it you could lose out on
that high offer.
So the alternative is to “take offers as they come”. But what do you
do when one comes too fast, may be even higher than your asking price, and you
have the feeling that “not enough people have seen the house”? Could you
have a higher offer by waiting for more people to have the time to see the
property and work on an offer? In real estate we say that the first offer
is often the best one... In a typical market it is often true (the subject of another blog), but the Bay Area market is
not typical.
Several elements are in play here:
1/ the (pricing) strategy you prefer to use (low, average, high?)
2/ how active the market is at that precise moment.
3/ how easy it is to show your property,
4/ how desirable your property is (objectively),
5/ the quality of the information you get. The tools your Realtor is
using are going to be critically important, in order to assess the
real
interest your property generates.
You’ll
want to know: - number of showings, - number of page views on the various web
sites, - how many people are looking at the info online, - and what exactly
they are looking at: some info, or all of the info available?
What I would like to stress here is that you must have this conversation
with your Realtor ahead of time, and stick to your chosen course of action. One
cannot really have it both ways.
If you
set a date for offers, and take a pre-emptive offer, you may hurt yourself by
never seeing the offers that played by the rule, and waited to come forth.
The thing is that you will never know - it is
a gamble.
My experience has been that,
in very active markets, it is better to hold off until about a week after the
house has been in full marketing mode.
Taking
an offer too fast may leave you with a lot of question marks about what other
offers could have been a few days later.
Finally, it is critical that your Realtor follows closely any interested
party, and answers questions as best as possible: better informed buyers, or
agents, will bring you an offer, and one additional offer may mean a big
difference in the final sales price.
Thank you for reading,
Francis
Silicon Valley real estate specialist
Detailed, local trends etc...
Current
mortgage rates
A worthy local non-profit to remember:
Community Services Agency in Mountain View.
