Mean­ing of an old real es­tate adage

The Palm Beach Post - Residences - - Front Page -

Ques­tion: Why do they say “your first of­fer is usu­ally your best of­fer?”

An­swer: There is very strong ra­tio­nale be­hind this adage. When a prop­erty’s list­ing first launches, it has the most mo­men­tum. The list­ing is fresh and buy­ers may feel that if they don’t move for­ward, some­one else might.

If a buyer is com­pelled to make an of­fer, they are likely to sub­mit the price that they feel it’s worth. The buyer’s as­sess­ment could be based on sales com­pa­ra­bles or their per­cep­tion of the prop­erty’s mar­ket value.

While that first of­fer may not al­ways be the best price a seller could ob­tain, as time goes on, if the prop­erty doesn’t sell, the prop­erty is likely to have a price re­duc­tion (or several price re­duc­tions). In ad­di­tion to on­go­ing car­ry­ing costs, ap­pli­ances may break and roofs may leak, which can be costly.

Also, from my ex­pe­ri­ence, sell­ers are usu­ally more op­ti­mistic when their prop­erty is first listed, and in­creas­ingly less so after their home has been on the mar­ket and they re­al­ize their goals may not be re­al­is­tic. Be­cause a seller doesn’t know if more homes will come on the mar­ket, or how the mar­ket will fluc­tu­ate, a seller may end up hav­ing to ac­cept an of­fer down the road that is ac­tu­ally less than the first of­fer that was sub­mit­ted.

To com­bat the un­cer­tainty of whether or not an of­fer is strong, it is im­per­a­tive to hire a real es­tate pro­fes­sional who is the ex­pert in your mar­ket. They are best po­si­tioned to ad­vise you re­gard­ing the strength or weak­ness of an of­fer — whether it’s your first of­fer, your second, or your third.

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