Almost every seller will at some stage hear this from the estate agents when the first offer is presented, but is it true?
Gerhard van der Linde, Managing Director of Seeff Pretoria East says that
there are exceptions to the rule, but there is a very good reason why estate agents encourage sellers to seriously consider the first offer.
We need to understand that buyers are well informed as to what represents good value in the market, and the access to the internet portals give potential buyers access to everything that is available within the various price bands and suburbs.
Thousands of buyers are registered on these portals to receive alerts when a property within their price parameters is listed, and estate agents are pro-active in finding buyers for the property using a myriad of opportunities that are available through social media platforms and clients on their data base.
All of this translate into clients who are well informed in terms of what is available and will assist in making an educated decision before the offer is made.
Van der Linde says that the most important aspect of the sale of a property is to pay serious attention to the advice given by an experienced estate agent when the agent presents a competitive market analysis before the marketing campaign is launched. If the property is correctly priced, the response will be almost immediate. If the price is inflated, you will soon find that the market is not responding, and unfortunately overpriced properties then stay on the market for very long periods, and eventually sell for less than what could have been achieved at the outset had it been priced correctly.
But why is the first offer usually the best?
According to various experts, sellers need to appreciate how buyers think in order to understand why things can go pear shaped if they reject offer after offer after offer because they are waiting for something just a little better.
Buyers generally all operate in much the same way, by dipping their toes in the water. This testing of the water doesn't necessarily mean that they are going to approach an estate agent with their list of requirements. Instead, they will generally begin by checking out prices online and visiting a couple of show houses in the area in which they are interested.
Those who are really serious about buying will then follow up by contacting an agent in order to find out as much as possible about a particular area, including how much the average property is currently selling for. Things start to hot up from here and, having narrowed down their search parameters, buyers will start to make appointments to view specific properties. By this stage they will have a good idea of property values in the area and would have begun making enquiries about bonds. Remember, the information they have acquired isn't a thumb suck, it's the result of intensive investigation, sometimes conducted over a period of months. And this type of buyer is often the one who will submit the first offer on a property.
Sellers need to consider a few things before rejecting a lower offer outright. Who is the buyer? How long have they been looking for a property? Which agent are they working with and perhaps most importantly, what conditions are attached to the offer? A deal without suspensive conditions is always going to be the best deal, mainly because the transaction is guaranteed. An offer which is reliant on another property being sold to help finance the transaction might be the higher offer but not necessarily the better offer, despite the amount being higher.