Anyone who has been trying to buy a home knows how competitive and challenging it can be for buyers. Since inventory is so thin, sellers often receive multiple offers within days of listing the home. The most common approach recommended by the seller’s agent is to immediately offer a “highest and best” offer to all potential buyers with a very short window, usually 24-48 hours. The goal is to give everyone an equal chance to improve their offers and in hopes of getting a higher price and or better terms. This is a simple approach for the listing agent, but not always what’s best for the seller. Here’s why:
- Don’t be in a rush. Someone who really wants the house will wait an extra few days. If they aren’t willing to wait, then better to eliminate them for contention early in the game. A cooling offer period minimizes your chances of landing an impulse / emotional buyer who got caught up in winning the bid, versus buying the right home. Use this time to your advantage and pay close attention to how the buyer and their agent behave. If they are difficult, it will only get worse.
- Have a flexible deadline and don’t back yourself in a corner. Things can change quickly when a buyer thinks they are going to lose the house.
- The highest offer isn’t always the best. Be sure to have your agent properly vet all potential buyers by asking about financing and how long they have been looking. There are other important issues when you are selling, like possession, inspections, and financing.
- Closing is what counts and the person who least can afford your home is usually the one that is willing to pay the most. Be careful and make sure they are likely to close.
As a seller, keep an open mind and remember there is no single approach to managing this process. The best approach may not always work in all transactions. Knowing you have options will make you a better negotiator and increase your chances of having a successful sale with minimal stress.