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July 23, 2020

REAL ESTATE'S GREATEST DANGERS – HOW TO AVOID THEM THROUGH SMART DECISIONS - PART #11 - REJECTING EARLY OFFERS

The location is ideal, it has the right number of bedrooms and living spaces, the yard is great - it feels like the perfect home. Occasionally, a buyer matches property to perfection.

This buyer is going to live in the property. It will become their home. There is an instant and strong emotional connection.

This is the 'heart buyer'. Heart buyers are seen early in marketing campaigns and only want that specific property. There are generally two types of heart buyer:

1.  They have been looking for a long time.
2.  They have not been looking at all.

Some buyers are searching for a particular property. Constantly scouring the Internet, they know the area they want and drive around regularly looking for new signs. They get every new listing alert and when that perfect property comes on the market, they move to purchase quickly.

Others buy a property even though they are not actively looking to purchase.  Often they have not looked at any property advertisements.  Then, they see a sign on their perfect property, or someone mentions it has come onto the market. These buyers also move quickly.

This situation produces the following disconnect. The heart buyer makes a fair or even an above-market offer on a property, only to see it rejected.

Why?

Because the property is early in the selling process and hope is high for a great price.  The improbable lie of the agent is still fresh in the seller 's mind.

They want to believe. This belief destroys any chance of the seller beating the market price.

The best offers repeatedly come early, and it is dangerous to reject them.

When faced with an early offer, sellers tend to compare it to the asking price, or to the price suggested by the agent.

Offers should be checked against the following price indicators:

  • Instruct your agent to confirm that this offer is in fact the final and highest price the buyer is willing to pay.  Then, if you trust your agent, and the offer is within their advised selling range, consider it seriously.

  • Look again at comparable properties that have recently sold. Compare the offered price to these. Ask your agent's advice. If you don't trust your agent, terminate their services immediately.

  •  If still in doubt, get the opinion of an independent valuer .


Keep in mind when selling that many of the best sale prices happen very early In the selling process.

Never dismiss an offer without first carefully analysing and measuring it against the correct indicators mentioned above. Then give the offer careful consideration before acceptance or rejection.


This article is an excerpt from “Real Estate’s Greatest Dangers – How to avoid them Through Smart Decisions” written by Andrew Trim – Managing Director of the Johnson Real Estate group - To receive a free please email mail@goulburnre.com.au and we can post a copy to you or visit our office at 148 Auburn Street.