Most home sellers want their house to sell fast and for the most amount possible. Luckily, those two things usually go hand in hand.
But once a seller gets an offer, they often wonder if it happened too fast, and whether it’s the best offer they’re going to get, or if they should wait for a better one to come in. If they’re smart, they should probably take the first offer that comes in, because there’s an old real estate rule of thumb that typically holds true: the first offer you get is usually the best offer you’ll get.
Unfortunately, that’s not always the choice a homeowner makes. Sometimes they feel like perhaps their agent is just saying that to make their job easier, and to collect a commission check more quickly. Or they wonder if they’re the exception to the rule, and would be leaving money on the table by not holding out for another offer.
There Are Exceptions…
US News & World Report recently published a list of six times you should accept the first offer on your house, such as:
- When you get an offer as soon as it hits the market
- When it’s a cash offer
- When the offer doesn’t have any contingencies
- When there isn’t much interest in your house
- When you need to sell fast
- When your agent advises you to take the offer
But to be fair, there are exceptions to the rule. For instance, while all of those could be solid reasons to take the first offer that comes in, it’s not necessarily true in each and every situation:
- Sometimes an offer coming in days after listing your house isn’t the best offer you could get.
- Or just because it’s a cash offer, doesn’t mean it’s the best offer.
- An offer without contingencies is great, but not if the price is far below what you could get from another buyer who has contingencies you’re comfortable with.
- Not having much interest in your house might be related to the current market, time of year, and a little patience may be needed.
- Needing to sell fast can make people desperate, but perhaps your agent feels hanging on for another couple of weeks will be worth the risk and wait considering your situation.
Out of all of them, the one you could say is the most true is to listen to your agent if he or she suggests you take the first offer that comes in; they’re the ones with the experience and knowledge to know if the first offer you receive is worth taking in your situation.
The problem is, you need to trust your agent if and when they advise to take the first offer!
The solution is pretty simple: hire an agent you trust.
Here’s Why the First Offer Is Usually the Best…
Even when you hire an agent you trust and they suggest taking the first offer you receive, there’s always a chance you could doubt the advice. In order to avoid that, it might help for you to understand why the first offer is usually the best offer you’ll get.
Agents aren’t just making it up. It comes from experience, and isn’t something your agent will necessarily be able to prove with data. Over time, agents see enough situations where a seller opted to forgo the first offer that came in — hoping for a better one — only to eventually accept an offer for less than the first offer they received.
Here’s why the first offer is usually the best offer:
- Buyers are on top of every house that gets listed pretty much the minute it hits the market nowadays, due to the Internet.
- The most serious, motivated buyers have likely seen everything that’s currently on the market and either decided it wasn’t right for them, or not worth the price.
- There’s also a good chance they’ve missed out on houses they did want to buy because another buyer beat them to the punch, or outbid them.
To put it simply… they know the inventory. They understand the values. And they don’t want to lose a house they want to another buyer. So the first offer you receive is most likely going to come from the most serious buyers in the market, and they’re going to make as strong an offer as possible.
Will you get offers from other future buyers if you turn them down? Sure. but they probably won’t be as good as the first because they’re not as motivated, and the longer your house is on the market, the more buyers feel like they can offer less, and negotiate on the price and terms.
That Doesn’t Mean You Shouldn’t Negotiate…
While the first buyer you get an offer from is likely to be the best one, their initial offer might not be. There’s a good chance you can negotiate with them and get them to increase their price and/or other terms of the deal. So don’t take all of this to mean you should just sign on the dotted line for whatever they offer you at first. But once you (and your agent) feel like you’ve gotten the best price and terms the buyer is willing to offer, you should seriously consider taking it.
While there are exceptions to the rule, the first offer you receive is usually the best one you’ll get when selling a house. That doesn’t mean you can’t negotiate and get the buyer to offer better price and terms than they start off with. But the first buyer to make an offer is most likely serious, motivated, and highly aware of the market, so they’re probably going to make a strong offer in order to avoid losing the house to another buyer.