Real Estate Questions and Answers | Immovable
Four siblings are trying to sell a house. The real estate agent quoted a price that two of us thought was too low. Her hope / plan is to have an offer at the open house the day the house is listed. It looks like this will make an aggressive buyer come up with that lower list price or an even lower offer. Can we stand if an offer is lower than the list price? So, this is the flip side of your “Make an Offer Before the Open House” article. How do you stay open to higher bids without losing the buyer?
Okay, there are several angles to the question and the answer. First of all, good luck with the four siblings who are “trying” to sell a house! I’ve found over the years that trying to get four siblings, or fewer for that matter, to agree on anything is quite difficult. I come from a family where I have three older sisters and as you can guess unanimous agreement is as rare as a Yeti sighting! Having said that, I think your real estate agent’s strategy is a bit risky… by putting all his (your) eggs in the open house basket! For the purposes of this answer, I’m assuming the house in question is sold locally, as we occasionally receive questions from outside our area and the location was not included in your question.
For anyone who has read this column for four or five years, you know that I am not a big fan of traditional open houses! Why am I not a fan of the open house? Simply put, they have no impact on generating open house deals. Does that mean they don’t work? No, it just means that in our market they are not very effective in creating an atmosphere of binge eating. I know, I also watch HGTV and see the open house frenzy at the end of every episode of Flip or Flop, Good Bones or Hometown. (By the way, these are pretty much the only types of shows, outside of football or hockey, that we watch at the Kimbrough House!) Sadly, I’ve never seen it work that way … they call it reality TV, but that’s far from the case. reality that I have ever seen. Again, that doesn’t mean it won’t work, it just means the stat odds aren’t high! If this magical open house isn’t working out and you don’t get any offers or the offers you receive are from “bassists” (every time I hear the word ballers I think of The Rock), you certainly can. expect a higher price. price from another buyer down the line. If you receive an offer at your asking price and don’t agree, there may be potential issues with the agent’s commission owed, but that’s a question for a completely different column. The last part of your question is kind of like having your cake and eating it too! How can we expect higher bids and not lose our low cost buyer? This answer is also simple… you can’t!
I have heard my mom say this many times… you are pregnant or you are not! When it comes to real estate, you are either under contract or you are not! You can’t, at least no self-respecting buyer would allow you to shop their contract, contract with a buyer, and continue to solicit bids from other buyers which may be higher, and then just go kick your current buyer out of bed! It just doesn’t work that way… or maybe it works in some weird “reality” TV show! You need to list the house at the price you are willing to sell it at and then market it to solicit bids. One angle we will use from time to time when we believe there may be unusually high demand for a property is to put it on the market and then hold all offers for a period of 5 days. This allows for more than just an open house, it allows for a good saturation of the market and the generation of traffic and interest in the hope of accumulating several offers where you end up with buyers competing for the property. Sometimes this works great, but it works best when the property is unique, in a high demand price range, or in a high demand area.
Ultimately, you can see this as any family would when there is rift in the ranks… two of you will be right and two of you will be wrong! Sometimes being right is the only consolation you get!