After preparing your home for sale and listing it on the market, you receive an offer almost immediately. Do you accept the first offer on your house or wait to see if you can get something better?
Casey Napolitano, real estate agent, broker and founder of NDA Real Estate in Southern California, says the first offer is usually the best, but every situation is unique and sellers should assess the strength of the offer before making a decision. But there could also be drawbacks.
“Accepting the first offer may mean that you haven’t fully explored the market and might be leaving money on the table,” Napolitano explains. “If you receive a strong offer early on, it’s possible that there could be other buyers willing to pay a higher price. By not waiting for additional offers, you may inadvertently underprice your property.”
Here are six scenarios where the first offer is the one you’ll want to accept.
— When you get an offer as soon as it hits the market.
— When it’s a cash offer.
— When it’s a contingency-free offer.
— When there’s limited interest.
— When you need to sell fast.
— When your agent advises you to take the offer.
[Read: The Guide to Understanding Your Home Value.]
When You Get an Offer as Soon as It Hits the Market
It may be tempting to hold out for a better price when selling your home, especially when your home is newly listed. However, there’s a rule of thumb in real estate that the first offer you receive is usually the best.
“I always tell my clients from personal experience that your first offer is usually your best offer,” Napolitano says.
When there’s limited inventory and high buyer demand, sellers generally have more leverage and buyers are typically willing to offer the asking price at the very least when the home hits the market. “Receiving an early offer indicates strong interest in the property,” Napolitano says. “If the first offer received is at or above the asking price, it may be tempting for a seller to accept it, especially if the offer aligns with their expectations and the current market conditions.”
Not taking action can also come with consequences. Kimberly Jay, associate broker at Compass in New York City, once had a seller who received an offer from the first buyer who saw the property. Instead of accepting the offer, the seller decided to show the property for a week before making a decision.
“Well, after that week, the buyer was turned off by the seller’s actions and purchased something else,” Jay explains. “The property stayed on the market for a number of weeks and closed at a price much less.”
But you don’t have to accept the offer at face value. Napolitano says sellers shouldn’t accept if it doesn’t align with expectations or current market conditions. Another option is to counter the offer, which the prospective buyer can accept, reject or counter.
[Will Virtual Staging Help Sell Your Home?]
When It’s a Cash Offer
It’s not only about the price. Getting a guaranteed quick closing with no strings attached could be a better option.
A cash offer means the prospective buyer has all the cash they need to purchase the home without financing. Cash transactions are often more attractive to sellers, as there’s no risk of the sale falling through because of an unexpected problem in the traditional financing process. Because there’s no mortgage, you can skip several steps in the transaction and get to the closing table quickly.
“Cash offers typically have fewer contingencies and can provide a faster and smoother transaction process,” says Scott Bergmann, a Realtor with Realty ONE Group Sterling in Omaha, Nebraska. “Sellers may benefit from the added security and certainty that comes with a cash offer.”
When It’s a Contingency-Free Offer
“Another scenario where sellers may want to accept the initial offer is if it comes without any contingencies,” Bergmann says. A contingency is a clause added to the home purchase contract that allows the buyer to back out of the deal if the terms of the clause aren’t met.
Contingencies are less common in a strong seller’s market, as they’re typically more helpful to buyers than sellers. “Contingencies, such as financing or inspection contingencies, can introduce uncertainty and potential delays in the sale process,” Bergmann says.
Sarah Stone, associate broker at Douglas Elliman Real Estate in New York City and Connecticut, says that one strategy buyers have been using is to make an offer over the asking price and waiving all contingencies with the condition that the home not be shown to any more competing buyers or canceling the public open house.
“This may be extremely enticing to a seller, and save you the headache of having to keep the house in pristine showing condition,” Stone explains. “I always firmly suggest to sellers that they have a backup offer in place before accepting your first offer. Often, for reasons completely unforeseeable in the early stages of an accepted offer, the deal can go awry.”
[Read: How Does Selling a House As-Is Work?]
When There’s Limited Interest
You’ve listed your property, but there’s been no interest, and sits for weeks on the market. After 90 days on the market, most real estate agents call this a “stale” listing, which is often stigmatized. The economy and market can affect how long a home sits on the market. If the house was priced too high, that could also impact how quickly you receive an offer.
“The longer a property is on the market, the more buyers perceive the property as having potential issues, which other buyers don’t want, so they don’t want either,” Jay says.
When You Need To Sell Fast
Certain situations may require you to sell quickly. “Sometimes, speed is of the essence, especially if the seller needs to relocate quickly or has already purchased another home. In such cases, the first offer might be the best one simply because it allows for a quick sale,” says Denis Smykalov, broker and founder of Wolsen Real Estate in Miami. “A bird in the hand is often worth two in the bush.”
When Your Agent Advises You To Take the Offer
Your real estate agent will always be your best resource during the home sale process. If your agent advises you to take the first offer, there’s generally a reason behind it.
“Experienced agents have a deep understanding of the local market and can provide valuable insights on the offer’s competitiveness and alignment with the seller’s goals,” Bergmann says. “Trusting their expertise can help sellers make informed decisions.”
More from U.S. News
How Do Real Estate Commissions Work?
Types of Roads That Can Have a Big Impact on Home Sales
When to Accept the First Offer on Your House originally appeared on usnews.com
