Why You Should Not Always Accept the Highest Offer When Selling
by Housesimple on 9th September 2015
Really? Isn’t the whole point of selling a home to get as much money as you can from the deal?
Well, normally yes. A seller normally accepts that their initial price is likely to be cut by 5-10% and that the highest offer is likely to be the one that takes the deal. But are there any occasions when one might think twice? Here are several scenarios when going for the biggest offer might not pay dividends.
*It seems to good to be true
Let’s imagine that you’ve placed your property on the market and within a week you get an offer, for the full amount or more, from a developer or property magnate. That suggests they’ve been keeping an eye on your home and waiting for an opportunity to snap it up. Extrapolating that further could mean that there’s a reason that your home is valuable…
Do some digging. Is there something that could push up the value of the home in the near future? Perhaps a new shopping centre, school or development is in the planning stages nearby. Maybe your home will be demolished for the purposes of a new road, and the buyer wants to extract maximum value by holding any highway developers to ransom. Maybe your home is worth more than you think, for some reason. Maybe there’s a treasure chest of Roman coins believed to be buried in the area…
You might just take the offer and price be damned. However, hanging on for 6-12 months to discover the full story could be prudent.
*Complex chains and personalities
You may not always know the accommodation status of the buyer, but if you do, and it looks tricky, then tread carefully.
The Washington Post contains several points of advice here, detailing a tale of a client who received three offers on a house and accepted the lowest of the three. The eventual buyer was the only applicant to pay for a full survey, meaning that they were serious and less likely to barter on the price.
Other potential perils include the highest bidder struggling to sell their present home, or an argument erupting between a buying couple before the sale goes through – this writer has heard of such a scenario at least once before.
If you need to move quickly – if you have a job offer elsewhere, for example – then you may have to go for the buyer who can deliver the goods the quickest, even if those goods are a few pounds short of the best offer. This may be where online estate agents such as Housesimple.com can help, by selling your house on average nearly 50 days faster than some high street agents.
Yes, you might lose a few thousand pounds in the value of the home, but that could be balanced out by saving thousands of pounds in agents’ fees.
Of two potential buyers, one with a higher offer and no mortgage in place, the other with the lower offer and a mortgage offer in principle, which is the safer bet? It’s the latter.
Of course, the former might be perfectly able to get a mortgage but you should ask yourself why they haven’t done so already. Mortgage lenders consider a whole range of issues when considering the possibility of an offer, from credit history to deposit size to incomings and outgoings. The buyer with the offer has been through that grind – the buyer with no offer hasn’t.
One final point; beware of any wannabe-buyer who does not appear to have thought about stamp duty and solicitors’ fees when doing the maths.