Is Your First Offer Your Best Offer?
An old rule of thumb in real estate is that your first offer it usually your best offer. In my experience this is true more times than not.
That first offer may not have been what you were hoping for, but it is wise to consider several factors before responding to that first offer. Think about the season, competition, time on market and your price vs. your Realtors recommendation. All of these should be weighed when deciding to accept, reject or counter that first offer.
Your first instinct may be to hold out for a better offer, especially if your home has not been on the market that long or if there is a lot of showing activity. That activity declines after the first couple weeks, after many of the buyers currently looking will have seen your home. Buyers rush out to see newly listed homes. If it is the best they have seen, they may make an offer. They have been looking for a while and understand the market. They are ready to move on the right home. That offer they make is based off of the other properties they have seen during their search and if you're the seller, they have seen more of the market than you.
After those first few weeks the only showings you will see are from new buyers on the market. They are at the beginning of the search and usually are less motivated to make a quick offer. They also don't have the market familiarity built up and will want to err on the side of caution. This will cause offers from them to be lower than a buyer more educated in the market.
The longer your home is on the market the more shop-worn it becomes and the perceived value erodes. Realtors and buyers become less interested in seeing or showing your property. Some will wonder what is wrong with your property that it has not sold. Even if they find nothing wrong, they will be skeptical and offer less so they don't lose money if they need to sell.
There are also the costs associated with holding your property longer. Every month that goes by you have a mortgage payment, insurance payment, taxes and cost of utilities. All these costs add up over time will quickly erode a few thousand dollars difference in the price received.
What this adds up to is you are never in a better position to receive the best price than when your home is fresh on the market. Even if that offer is less than you were hoping for you don't want to be kicking yourself in a few months time for not just taking it. You may just wish you had. That rule of thumb it more true than not. Your first offer is usually your best offer.
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