Receiving an offer on your home is exciting, but you may feel disappointed if it’s less than the asking price. If that happens, you’ll have to decide whether to accept the bid or wait and hope that another prospective buyer will offer you more money.
When You Should Entertain the First Offer
If you get an offer below the list price, you don’t necessarily have to accept it or reject it. If the initial bid is close to the asking price, you can submit a counteroffer and possibly meet somewhere in between.
If the buyer isn’t willing to pay more than the initial bid but can pay cash, it may be a good idea to accept the offer. A buyer who needs to take out a mortgage may be unable to get final approval for some reason, but someone who can pay in cash won’t have an issue. That means you won’t have to worry about the sale getting delayed or falling through.
You may have to move in the near future, or you may need to wait a few months for some reason. If the buyer who made the offer is willing to be flexible on the closing date, accepting the first bid may be your best bet.
Home prices are based on the prices that comparable houses in the area recently sold for. If homes similar to yours sold for less than your asking price, a low offer may be reasonable, given current market conditions. If your area is experiencing a buyer’s market and there are plenty of houses similar to yours available, it may be difficult or impossible to find a buyer if your list price is too high for the current local market.
Houses that are priced right tend to sell quickly. When homes linger on the market for weeks or months, buyers lose interest or assume that those properties are priced too high or have problems. If your house has been on the market for a long time, the offer you received may be the best one you’ll get.
When to Turn Down the First Offer
A bid below asking price can be a place to start negotiating. If the offer is way below fair market value, however, the buyer may have unreasonable expectations. You may choose to present a counteroffer and see what happens, or you may simply reject the bid.
If your area is in a seller’s market and there are many more people looking for homes than what is on the market, it may be in your best interest to hold out for more money. That may make even more sense if you only recently listed your house and you’re not in a rush to move.
The risk is that if you reject the first offer and your home sits on the market for months, buyers may lose interest. You may have to lower the price, possibly more than once, and your house may eventually sell for less than the initial bid.
