Receiving your first offer on your home is an exciting moment. You can finally see the potential payoff for all the work you put into preparing your house for the market. At the same time, you might also wonder whether a better offer will come your way if you wait.
While you never know what the future will bring, waiting too long in the hopes you’ll receive a stronger offer can backfire. In most situations, accepting your first offer is the safest and most profitable choice.
Understanding the Buyer’s Mentality
When you receive an offer shortly after listing your house, the buyer has probably been in the market for a while and understands the value of homes in your area. Understanding the mentality of the average home buyer can help you evaluate your offers.
In most cases, buyers start their search by looking at listings online and going to some open houses casually. At this stage, they’re just doing their research and aren’t planning on making any offers.
By the time a buyer hires a real estate agent and receives a mortgage pre-approval, they’ve likely been researching the market and keeping an eye on home listings for a while. They’ve seen how quickly good houses can be taken off the market, so they know that they have to act fast when they see a home they’re interested in.
Early offers on your home usually come from these buyers who understand the market and are serious about the purchase. They’re committed to their home search and know that time is of the essence. Therefore, the earliest offers you receive for your home are almost always the strongest offers.
Risks of Leaving Your Home on the Market
Not only do you get your best offers early on, but leaving your home on the market for too long can also have a negative impact. The vast majority of your showings will happen in the first 30 days that your home is on the market. After this, interest will start to wane, and your chances of receiving an offer at all will diminish.
When buyers see a home that’s been on the market for more than a month or two, they assume that something is wrong with the property. They may pass over your listing or make a low-ball offer because they think you’ll be desperate to sell the house.
When to Accept Your First Offer
As a general rule, you should strongly consider accepting the first offer you receive if it meets most of your requirements. The following are some specific scenarios where accepting your first offer is probably your best move:
Cash Offer
An all-cash offer is difficult to pass up. Even if the buyer offers less than your asking price, closing a sale with a cash offer is much faster and easier than closing with a mortgage.
Cash offers tend to be very safe because there’s no risk of a mortgage application falling through. You also don’t need to go through the appraisal process. In many cases, cash offers are “as-is,” so you don’t need to negotiate about making repairs to the home.
No Contingencies
Price is only one factor you need to consider when evaluating an offer. The contingencies included in an offer can also make a difference in its overall appeal.
One of the most common contingencies buyers include in their offer is a home inspection contingency, which allows them to renegotiate or walk away from the deal if the inspection reveals problems with the house. Some buyers include a home sale contingency, which means the deal can only close if the buyer has sold their own home first.
When an offer includes a lot of contingencies, there’s always a risk of the sale being delayed, renegotiated, or falling through altogether. The fewer contingencies the buyer includes in their offer, the better it is for you as the seller. If your first offer waives contingencies, it’s a great sign that it’s the right offer to accept.
Strict Deadline for Selling
Accepting the first offer you receive is the safest choice when you have a tight schedule for selling your home. For instance, you might need to close on the sale of your house before you can purchase a new home, or you may need to relocate for a job change or another major life event.
Although it’s always tempting to wait for better offers, rejecting an early offer when you have a strict deadline can be too risky. Unless you and your agent are completely confident that you’ll receive a better offer soon, you should stick to the first one you receive.
Selling During the Slow Season
Homes usually sell faster in the spring and summer. Sales start to decrease in the fall, and by the winter, the market slows down to a crawl. If you put your home on the market in the late fall or winter, you should expect to get fewer offers because many buyers have paused their search.
Limited Interest
Within a week or two of listing your home, you and your agent will get an idea of how much interest there is in your home. If your open house gets lots of visitors or your agent is flooded with requests to see the house, you’re likely to receive at least a few offers soon.
On the other hand, if your open house gets little traffic and buyers aren’t reaching out for showings, rejecting your first offer can be risky. The longer your house sits on the market, the more difficult it will be to get good offers.
When Not to Accept Your First Offer
Accepting your first offer is a wise idea in most cases, but it’s not always the right advice. Every situation is different, so you and your agent should still weigh the pros and cons of your offers carefully. Here are two situations where you might consider rejecting your first offer:
Offer Made Within Hours or Days of Listing
If you receive an offer immediately after putting your home on the market or within hours of an open house, it’s a great sign that your property will generate a lot of interest among buyers. In this case, you could decide to wait another week or two to see what other offers come in.
Extreme Low-Ball Offer
Sale price is only one part of an offer, but it is important. Unless you’re absolutely desperate to sell your home, you might decide to reject a low-ball offer and hold out for a better opportunity. An offer that’s 20% to 25% below the asking price is generally considered unreasonable, especially if the offer is made shortly after you list your house.
Choosing which offer to accept is not an easy task. It’s natural to want to wait for the best possible offer, but if you wait too long, the right opportunity may pass you by. Unless it’s ridiculously low, you should give your strongest consideration to your first offer. As always, listening to the advice of a trusted real estate agent will also help you make your decision.