Should I accept the first offer made on my house?

Invariably, most interest in any given property is generated within the first couple of weeks of it being marketed.  This is a fact which is easily demonstrated by website statistics and which is well worth remembering.

Let’s look at a typical scenario.

You’ve had three estate agents around to value your property and you’ve been tempted to take the highest suggested valuation.  After all, right at this moment you’re in no real hurry and you feel like chancing your arm.  All three agents were up-beat about the prospect of selling your home and the agent who valued it highest was really enthusiastic about his chances, having one or two potential purchasers in mind.  And, apart from anything else, he was cheaper than the other two!

Very often an agent feels forced to value a property at a slightly higher price than his best judgement suggests.  If he doesn’t the property is likely to be listed with another agent.  It’ll be that one competitor to whom he continually loses instructions (as a result of valuation) and he is beginning to run low on stock and needs to sign up a few vendors by the end of the month.  And, to make life easier still, he sharpens his pencil more than he knows his competitors will and offers you a very competitive fee.

Your property is tidied up and hopefully styled to some extent.  Some great photographs get taken and it looks great online.  You get three or four viewings booked in the first few days and inside a week someone makes an offer which is somewhat shy of the asking price.

You speak to the agent and despite his best endeavours to talk you out of it, you dismiss the offer.  After all, it’s only been on the market a week, you’ve had a healthy number of enquiries and a reasonable number of viewings.  This is bound to continue and you’re bound to get the price you’re asking.  You conveniently forget for the moment that the offer is actually the equivalent of what one or two of the other agents have suggested is reasonable. 

A week goes by and your agent isn’t ringing as often to book viewings.  In fact, you may not have had any further viewings. 

Before you know it, you’ve been on the market a month or six weeks.  Other houses have come to the market after yours and been sold.  Why hasn’t yours?  It must be the agent’s fault.

In truth, it probably is the agent’s fault because he allowed you to believe that your home could achieve an unrealistically high price.  He knew better or at least he should have done, because he’s been selling homes just like yours for some considerable time.  Unlike you, he has access to all manner of sales statistics and probably knows to the penny what you should expect to achieve.

Ironically, there’s a very good chance that the person who put in the offer that you dismissed so easily because it was received so soon after being marketed also knows to the penny the value of your home.  He’s seen the prices achieved for many other properties he’s considered.

You see, you have dismissed it because it was received so quickly, but he made the offer because he has been searching for so long.  He’s probably viewed a good number and he may have been unsuccessful on one or two.  As a result, he didn’t want to mess about; he’s weighed up the pros and cons, arrived at a decision and made an offer.  An offer that you may well have been well-advised to take more seriously.  Did you even ask how long he’s been looking?  Did your agent tell you?  If you were told, did the relevance of this escape you?

Sadly, the early offer was made by someone who has now found an alternative, so that opportunity has been lost.

The only thing your agent can now suggest in order to try and drum up some interest in your home is to reduce the price.  It’s now two months on and you are finally listing your home at a price very close to what the other two agents suggested in the first place.  It’s actually virtually what the first offer came in at.  Leave it too long and it might be lower than the first and only offer you’ve had.

By now, those viewing properties regularly have decided not to enquire about your house.  They can see that it’s been languishing on the market for some while; there must be something wrong.  Has it failed a survey?  Does it perhaps need loads of work to make it acceptable?  On Rightmove they can clearly see the date that your home was first advertised.  They can see that the price has been reduced.  Some are sitting waiting to see when it will be reduced again and by how much.  They can sense a bargain-in-waiting.

One of the agents who came to see you showed you one or two properties that had sold recently and which you agreed were very similar to yours.  Nice décor, new kitchen, en-suite bathroom, conservatory and double garage etc.  But you thought yours was worth more for some reason.  By not accepting an offer early on, you might actually end up selling for less than the one which was most like yours.

If you find yourself in this position, it’s well worth taking your property off the market entirely and immediately.  Dis-instruct your current agent and wait until the notice period and the contract has expired.  Leave it off for a few weeks or a month and then instruct a fresh agent and take his advice.  By instructing a new agent, your property appears to have only just been brought to the market.  That person who has spotted the bargain-in waiting will see what is happening, but someone else just starting their search will not necessarily find this out.  Some 52% of all properties fail to sell with the first agent and sell only when sensibly priced with another agent.  That’s over half of all properties potentially brought to market at an inflated price.  There may be other reasons of course, but this is certainly the biggest factor.

If you aren’t yet in this position, but are about to market your home, there are a number of occasions when you must absolutely give the first offer some serious consideration:

  • When you have already found your dream home.  Delay accepting an offer and you will lose your dream home and it will end it tears.
  • When you have a quirky home that was actually difficult to value.  No matter what you or an agent values your home at, it is the market which decides.  If the offer is 5% less than you were asking, it may be that 5% less than the asking price is, in fact, its value.
  • When the potential purchaser is a cash-buyer.  There are so many opportunities for a sale to go wrong when there’s a chain or the possibility of a down-valuation at survey and a cash buyer may not be so diligent when it comes to a survey and may not have a chain.  Cash-buyers save so much grief that a slightly lower offer is very well worth considering.
  • When time is of the essence for whatever reason.  This offer has played right into your hands.

If, however, you are in this position and beginning to think that your home won’t sell and you wish that you had accepted an offer made early on, please call us or email us and we’ll happily visit you and have a no-obligation chat about how Belvoir can help get your house sale back on track.

If your home falls into the unique and hard to accurately value category, make sure you mention this and we’ll talk with you about our premium marketing strategy for such properties.