We get it. We do. If you are a seller, you can’t help but hear the stories about multiple offers, and homes selling for $25k, $50k, $300k over asking and think you have it made. Some sellers think that buyers will pay ANYTHING for their home, and become indignant when buyers dare to offer a price below their asking price. After all, their sister’s boyfriend’s Chiropractor has a neighbor who sold their home in Los Altos for $200,000 over asking! It is human nature, and we can’t blame you. After all, sellers had it kinda rough in 2008 – 2011, and the tide has turned in their favor. You want to ride that wave as long as you can.
My advice is to be careful. As a rule, every home is unique, and circumstances can change rapidly. While you may have the upper hand today, markets can and do shift, and you may not have it tomorrow. While there are still sellers in today’s market who are enjoying the fruits of an unbalanced market, there are other sellers who are experiencing the reality of the law of supply and demand. While some neighborhoods are hot, others have cooled. Here are some recent examples from the field of how sellers can shoot themselves in the foot by being too greedy (These are real life examples, but the details have been changed slightly for privacy reasons).
There’s the seller in San Ramon who priced their home at $990,000 expecting to see a bidding war on their home. They did get multiple offers… 3 in fact, the highest of which was $1,020,000. Not satisfied, the seller countered all of the buyers at $1,035,000. All of the buyers walked. The seller did get a subsequent offer after a couple of weeks, and the property closed at $1,002,000. Ouch.
Or the seller who sold their home almost right away for slightly over their asking price of $1,200,000. After the inspections, there were some needed repairs on the property. Seller refused to pay for any repairs, and the buyer cancelled. After several weeks, the seller ended up taking $25,000 less when they finally got another offer. And they ended up paying for the repairs on top of it. Ouch.
The market today is highly charged, with lots of emotion. Sellers would be well served to take a step back, and operate from a position of fairness. Because there is no guarantee that the next buyer will pay as much or more than the current buyer. Remember, you can’t force a buyer to buy your home. You can only entice them.
In the meantime, surf’s up! Ride that wave. Just don’t ride it too long and end up crashing into the rocks.