Don't Mess Up In Here...!
Originally Published October 23, 2006 -- was requested to put this back up, so try to put yourself back into time & place -- The principles still apply in today's marketplace -- A: If you are a new seller who has been on the market 4 weeks or less, then this post is for you. Fact is, if you take a step back and in hindsight look at the traffic patterns of any given exclusive, a pattern becomes clear. That pattern is sometimes the difference of tens of thousands of dollars in the end; IT WAS FOR ME!
Unless the apartment is aggressively priced, most of the activity will happen in the first 2-3 weeks and in the final 3-4 weeks (due to price cuts).
THE FIRST 2-3 WEEKS (The 'Should Have' Period)
I like to call the first two weeks of every exclusive the 'should have' period. The first 2 weeks is the period of time where you get a bunch of appointments scheduled from 'B' buyers who are trying to learn the inventory of their price point and their agents who just want to do a deal already. Maybe you'll get a few 'A' buyers too. Most likely, you'll get a low ball bid. Many times this very early bid is the nightmare for sellers 5 months later. So, I refer to it from the seller's point of view as the, "I should have accepted that bid and saved 5 months of agony".
It makes me think of that scene in Casino where Joe Pesci stares down DiNero as he goes to pick up his wife, Sharon Stone, at Pesci's restaurant. You know that scene, where Pesci snears, "Hey! Don't Mess Up In Here...!"...
(not the scene but has that same look)
In Hindsight, every financial decision is 20/20; including whether or not YOU, THE SELLER should accept that offer.
It is during the first two-three weeks of listing your property that you will get the most interest and if lucky, an offer. The offer will not be high but will be very close, the same, or most likely HIGHER than what you eventually accept down the road after multiple price cuts!I SAY TO YOU, THE SELLER, DON'T MESS UP IN HERE! And if you do mess up and ignore the offer because there is so much activity and you won't sell below a certain price in the first 4 weeks, to NOT blame it on your broker for failing to move your property at the highest & best price possible down the road.
MY STORY: When I had my condo on the market at Astor Terrace, I showed you the work I did and how I was going to market it, I got the most activity during the first 3 weeks. Every open house was packed and I was thinking JACKPOT! I even got a bid. I was asking $1,075,000 (much higher than I knew it would sell for but it was my home, and my home is worth what I say...yea right!) and got a bid of $950K. I shrugged it away without a response and played hardball. Yea, real smart.
Four months later I found myself $6,000 into weekly NY Times advertising and other marketing expenses, tired, worried, and 2 price cuts down to $975,000. Traffic dried up and I was getting very nervous. HOW COULD I HAVE DISREGARDED THAT OFFER! Nights became sleepless and bills seemed threatening to my financial well being.
I winded up accepting a $935,000 one time take it or leave it bid, up from $925,000 orginially. It was all cash and 'looking to close within a month' that made the offer a no-brainer for me. But the mistake was made and the lesson was learned.
THE LESSON: Think about any bid that you receive in the first two to three weeks! Think about even if it is well below your asking price. If you decide NOT to accept a low offer in the first 3 weeks, than be prepared to possibly have your apartment on the market for the next few months! I'll explain why right now.
4th TO 16th WEEK OF YOUR LISTING
During weeks 4 to 16th of your listing, assuming your property was on the market for 4 months or more, your traffic is pretty much the same; SLOW. The broker is showing the apartment 1-2 times a week, and you are having 2-4 people per open house. Not a good sign. The listing seems to have staled up, and feelings of nervousness fill both the agent and the seller as thoughts of 'problems with marketing' begin to arise. I usually hear questions like, "Why are'nt you showing the apartment more often?", or "The ad in the NY Times wasn't big enough", and the best one, "I want this place SOLD, so get to work and SELL IT!". Yea, ok.
You know what I think at this point? I hate to be the bearer of bad news but if you had 30 buyers through your property with no bid submitted, than your asking price is too high and needs to come down to reality; i.e. YOU HAVE TO WAKE UP!
I've said this over and over here on UrbanDigs:
YOUR HOME IS WORTH ONLY WHAT SOMEONE IS BOTH WILLING & ABLE TO PAY FOR ITIt doesn't matter that you are so close to the subway station, or that you have brand new stainless steel appliances, or even that you have a terrace (cause I had a sick one!). It only matters what a buyer will bid for it and whether or not you HAVE TO sell it right now. The problem is that as a seller, you get emotional and ONLY look at the positive attributes of your property when you price it and review offers! The solution should be to be as unbiased a seller as possible! Notice if your apartment is on a low floor, or has no views, or gets no sunlight, or is on a very busy/noisy street, or has a floor-through layout, or has low ceilings, or whatever! This is what buyers will be thinking about when they bid. A biased seller will be unable to make rational decisions when it comes to accepting an offer.
FINAL 3-4 WEEKS
Traffic begins to heat up as you already hit your turning point and have succomb to price reductions. It happened for me after 12 weeks on the open market and 11 open houses. A very long time for any nervous seller!
I didnt get a contract signed until the 18th week and 16th open house and for lower than what I was offered 16 weeks ago!Your price comes down and activity picks up. Wow. I can't believe it. It's amazing how this works. Why didn't I think of this earlier? Why didn't I respect what my broker originally told me 15 weeks ago about where to price my unit? Why was I so blind?
BECAUSE YOU ARE HUMAN. BECAUSE ITS YOUR HOME. BECAUSE ITS HARD TO SELL ANYTHING THAT HAS EMOTIONAL TIES, MEMORIES, GOOD TIMES & BAD.
But you must not be clouded in your financial decisions. You must be able to recognize when to move on an offer. You must be able to realize that a highly qualified buyer may NOT be so easy to find!
This post was based entirely on the notion of hindsight and what I have noticed AFTER looking back at my clients and my own exclusive listings, to see if there were any patterns. There were. If anything should be gained from this post it's that you must have the vision and the will to accept a reasonable offer if:
1. It comes very early and from a qualified buyer
2. Is reasonable in the sense that you were going to price your apartment at 750K but decided last minute to raise that to 800K. Now you get a 700K offer in first 2 weeks.
3. You are under time pressure to sell
Don't Be Stupid. Don't Be Greedy. Don't Mess Up In Here!