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Penny Wise and Pound Foolish or What Do We Do With All These Offers?

In today’s fast forward real estate market, it’s not unusual for a properly priced property to go into contract within the first two weeks of being listed, or even less! Often, at least one of the offers will be a “low-ball” from an investor, along with several owner occupant offers which typically come very close to providing the proceeds the seller expected to receive when s/he determined the asking price in the first place. In the flush of excitement over reviewing multiple offers, sellers frequently feel that the fast receipt of multiple offers means that there is keen interest and better offers are out there. Many of these sellers reject offers that would net them what they initially wanted when listing their home with the expectation that the next deal will bring them even more money. Sadly, in my experience this approach generally fails more frequently than it works. Even in fast-paced markets like ours, there are a lot of buyers who aren’t really emotionally invested in the houses they write offers on, and they are not interested in engaging in a bidding war.

Another way some sellers attempt to increase their net is by countering on buyer concessions. Buyers may ask for concessions with the expectation that they will get some, but not necessarily all of them. For these buyers, a counter offer from the seller may be something they would seriously look at. However, some buyers ask for concessions that, if they don’t get them, are “deal breakers” and these buyers are more likely to walk away from the purchase rather than consider a counter offer. The challenge is, the seller generally doesn’t know which buyers are which. An important thing for sellers to keep in mind is that every time an offer is countered, there is the likelihood the other party will not accept it and a sale will be lost.

I’m not suggesting that sellers simply accept offers without serious consideration, but rejecting or countering offers in the interest of getting a few more dollars than they were expecting can backfire spectacularly. Too many times I’ve seen sellers turn down or unsuccessfully counter offers which would have worked for them and end up selling months or a year later for less than they would have realized from the offer that just didn’t seem quite good enough at the time. The old adage “time is money” can apply to real estate sales as well. It’s important not too angst too much over the little stuff and focus on the net proceeds. As my mother-in-law used to say, “Don’t sweat the small stuff.”

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