Getting Nervous When Offers Come In Too Quick

Posted by urbandigs

Tue Feb 9th, 2010 10:12 AM

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A: This is a stupid little thing that does indeed happen out there in the world of real estate. The reason is because selling your home is a very emotional decision that can make some sellers wary and nervous. When the reality of a deal getting done inches closer, that is when the wariness can turn into nervousness; and that can lead to a rash decision that surprises everybody involved. Luckily it doesn't happen too often, but I did go through this three times in the past two months alone. In my opinion, the last thing you want as a seller broker is to have your client second guess their decision to sell OR their pricing strategy when first putting the apartment on the market. History usually shows that the best offers come in the first few weeks, but as a seller, sometimes you can't help but wonder if you really did price your property correctly?

One of the biggest headaches I find in this business is when you run into a seller that gets nervous or scared when you present a solid offer soon after the property hits the market. What does the seller want???? If you price at $1,250,000 and you get a solid bid in 3 days from a motivated buyer, why is that reason to get all nervous and nuts that ultimately leads to a rash decision?? Well it's not my place to say! I just question why the seller listed the apartment in the first place before thinking things through properly. Unfortunately my clients and I just experienced this situation for a midtown condo. Asking price $1,250,000, 3 days on market, we submit a solid offer and get a seller response of $1,240,00 - so we ACCEPT! And what are we rewarded with? A seller that got scared and removed the listing from the marketplace. This was the third one in the last few months (520w19, 144w27, & 200e58), and I thought it might make for a good topic of discussion.

Here is the rub: Its the seller's home to sell, they need to agree to all terms of the deal or its just not worth getting the attorneys started! In the end they are the one that must countersign the contract that the buyer signed first to seal the deal. Nobody can force anybody to sign that contract. Sure you might be able to calm a buyer or seller into more seriously considering one way or another, but you can't force them to sign the contract! That is something they must do on their own; likely after dealing with the emotions of buying or selling in their own way.

Whenever I present a solid offer for a property whose listing history is under 7 days, I get a bit worried that the seller may start to question things. On the one hand you may get a seller that is ecstatic to have gotten a solid offer in such a short period of time and who feels lucky to be able to move forward so fast. On the other hand, the seller may start to rethink their pricing strategy ---> Did we price too low? Did we give the market a chance to present all offers? Am I making a big mistake here? In both situations, the reality of selling hits home once that first solid written offer is received - it just becomes real and sometimes that can scare a seller a bit. Usually things work out just fine, but sometimes they don't!

I recall selling my condo at 245 E 93rd St, Unit 2M in early 2006. I received a $975K offer in the first week and played tough! The strategy didn't work and I lost the bidder. I wonder how serious they might have been anyway just removing the offer after we were $50K apart in negotiations that first week. Turned out I sold for 40K less some 4 months later. Doh! Live and learn I guess.

The worst is when a seller starts to rethink their pricing strategy and questioning if they are leaving money on the table because they got such a strong offer so quickly! Ugh, that is when the seller broker should educate their client on how markets sometimes work. Sometimes you have a perfect buyer (highly motivated) that missed out on a few places and maybe recently lost a deal because the seller took a higher offer or decided to remove the listing from market after accepting an offer. So, naturally, when the new place hits the market (your place) and the buyers like it they are ready to go in aggressively with all ducks in a row - something as simple as a situation like this. Yet the seller may interpret the situation differently; that they priced incorrectly and that is why they got this strong offer so fast. After all, this is my home and my biggest asset and I have one shot at getting the most money as possible on this trade! That is the thinking in the seller's mind in this specific situation.

The seller should be mindful that if the property was under priced in a market that is clearly active, that you should not only get a ton of traffic immediately but you should also receive multiple aggressive bids. Therefore, if you get one solid offer in the first 7 or 14 days you should NOT mis-interpret that to mean your pricing strategy was wrong; that could lead to a rash decision. The reality is more likely that a perfect buyer found your place at the right time and decided to make a statement to you in a timely manner that they want to do a deal - within reason of course!

I have always explained here on UrbanDigs that brokers do not dictate value of any one individual property, the market does! The broker's job is to educate you on where this market is, how to price your property to meet your time line to sell, and to market/service your listing in the broadest way possible to procure the highest & best offer. The market will ultimately price the true value of your home; and the market is bigger than all of us! Pricing right is the best strategy any seller can do right now, but it sometimes comes with the consequence of raising uncertainties in the seller's mind if they really have no true motivation to sell other than to test the market to see what their place might fetch. That is when the listing broker needs to either educate their client on market dynamics or question if this seller is real enough to warrant their time. Nervousness and wariness are natural human emotions that many sellers and buyers will feel at some point in the process - and the process can get very emotional! The key is to avoid letting those emotions cloud the right decision that works for your personal situation.