When it comes to selling your home, should you accept the first offer or should you wait for something better to come along?
This is a question that gets asked a lot. And while there is no hard and fast rule, the general consensus among industry professionals, including most real estate agents is that frequently, the first offer proves to be the best. That’s not to say that a seller should instinctively accept whatever offer comes along first.
Rather, it points to the importance of pricing a home correctly to sell in the current market. This takes effort on the part of savvy sellers to research the market and the competition; and to select and collaborate with a reputable real estate agent in order to settle with confidence on a realistic asking price.
Real estate agents are able to provide market appraisals – a seller should seek these from at least three different sources – that are based on knowledge of the local area, comparison sales and overall market conditions. Confidence in the asking price means that a vendor will be better equipped to assess and respond appropriately to any offer.
While there is no real science involved in the premise that first offers are often the best, it is clear that the longer a property sits on the market, the more shop worn or stale it becomes. Generally, a property attracts the greatest interest when it is first presented to the market. A new listing will attract the highest numbers of potential buyers.
This means competition, which in turn, helps to drive prices upwards. During this initial phase, real estate agents are primed to get a new listing in front of their most serious buyer prospects. Activity is at its peak during this early phase.
A five-year study by RP Data has shown that vendors overall, received less by waiting longer to sell. RP Data examined the average discounting levels for property sold within a number of different time frames – less than 30 days, 30 to 60 days, 60 to 90 days, 90 to 119 days, and 120 days or more.
Over the study period, it was found that homes that sold in less than 30 days, recorded the lowest levels of discounting. And homes that took the longest to sell – more than 120 days – consistently recorded the highest discounting figures.
On average, for homes selling in less than 30 days, asking prices were discounted by -3.9 per cent. In the 30 to 60 day selling period, the average discount was -5.2 per cent; 60 to 89 days -6.5 per cent; 90 to 119 days -7.6 per cent; and 120+ days -10.1 per cent.
Naturally, sellers are keen to get the best possible price for their property. In general, smart buyers do their homework and make reasonable offers. And astute sellers – those who recognise a serious offer or one with potential – will be inclined to accept.