Sep

4

Long Island Real Estate Market: Sellers, How Soon Is Too Soon?

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This Long Island real estate market has proven to be very challenging for many homeowners. We went from the gravy train to the express elevator in the penthouse…going down. For those sellers who have found themselves with early offers that kind of make sense, the question becomes: To accept or not accept?
There’s a general tip that usually, your first offer is your strongest offer. But then again, when it comes surprisingly quick, do you wait for a second offer or move on that first offer?
I was recently on the buyer’s end of this scenario. Although the home has (and still is) on the market for quite some time, my buyers (I am representing them as a buyers agent), my buyer’s offer was the sellers first (as per the listing agent). And it was a very good offer. With an asking price of $349,000, the offer was $332,500 from my buyers (just less than 5% from asking price).
Now in general, when an offer like this comes along from an agent like myself, who explicitly explains to the listing agent that this is a “highest and best” offer, you expect some kind of counteroffer from the sellers. Which we got, $345,000. Of course I explained to the listing agent that this is a highest and best. Now my buyers meant that sincerely. There rationale to me, there are a ton of homes on the market and while they like this home and would gladly pay this price, they would not pay more because they could find something else down the road. I agreed with them.
The listing agent called back a day later and said $340,000 and asked me if I could “get the buyers up”. My response was, “No, but I will see what they want to do.”
Needless to say, this home was not purchased by my buyers and the sellers are about to expire off the market, having yet again, not sold their home and are probably going to be looking at less than a $335,000 list price and about a $325,000 sale price.
So how soon is too soon? As sellers, you play a very fine line between obtaining a good qualified buyer and obtaining future price reductions. When an offer comes knocking at your door, seriously considering any offer that is within 5% to 8% of your asking price, in my professional opinion, is an absolute necessity.
Remember too, that coming across well qualified buyers with nothing to sell (the prototype 1st time buyer in this market) is like stricking gold. There seriously aren’t that many of them out there and certianly not enough to clear out inventory available.
So if you find yourself trying to sell, in my humble opinion, you need an agent representing you who is going to provide you with an accurate assessment of the situation. Obviously this listing agent did not do that. From my conversations I had, I could tell the listing agent was a “yes maam” type of agent, one that didn’t challenge her sellers with good information, pointing out the percentage difference (about 4.7%) from asking price to offer price rather than the monetary difference ($16,500). This listing agent did not explain the idea of “true equity value” and how the home will appraise. The listing agent did not review the overall market, and the trend in the area that averages over 4% difference from list price to sales price. This listing agent did not take the information I provided to prove that $332,500 was a very solid offer and sit down with her sellers to fully advise them.
So if you’re a seller in this market, having a listing agent who can help you make a deal happen, even if it’s a little bit less than what you want to sell it for, is worth the amount they’ll save you in further equity loss if you sell sooner than later.

(c) Copyright 2009, www.tommcgiveron.com
By Thomas McGiveron, LSA


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