Is the first offer on your property really always the best offer?
Almost every property seller will at some stage hear from estate agents that the "first offer is always the best offer", but is this always the case?
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The arrival of proptech has essentially shifted the way in which buyers operate. Today’s buyers are well informed on what represents good value in the market.
Access to internet portals means potential buyers have access to all properties and information in the various price bands and suburbs at their fingertips. They usually also receive alerts when a property within their price parameters is listed, which means they are far more knowledgeable about what is going on in the market.
This translates into clients who are well informed, and buyers will take that into account before the offer is made.
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 presenting a competitive market analysis before the marketing campaign is launched.
If the property is correctly priced, the buyer response will be almost immediate. If the price is inflated, you will soon realise that the market is simply not responding. And, unfortunately, overpriced properties then stay on the market for prolonged periods, and eventually sell for less than what could have been achieved at the outset had it been priced correctly.
Why is the first offer usually considered to be the best?
Sellers must appreciate how buyers think. Buyers generally operate in much the same way, by dipping their toes in the water. This “testing of the water” does not necessarily mean they will approach an estate agent with a list of requirements. Instead, they will begin by checking out prices online and visiting a couple of show houses in the area in which they are interested.
Gerhard van der Linde, MD, Seeff Pretoria East
Those who are serious about buying will then follow up by contacting an agent to find out as much as possible about a particular area, including how much the average property is currently selling for. Things heat up from here and, having narrowed down their search parameters, buyers will start making appointments to view specific properties.
By this stage, buyers have a good idea of property values in the area and would have begun making enquiries about bonds. Sellers should bear in mind that the information that buyers now have is not a mere “thumb suck”, but the result of intensive investigation, sometimes conducted over a period of months.
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, such as '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.
About Gerhard van der Linde
Gerhard van der Linde, managing director of Seeff Pretoria East
