I can never blame a real estate seller for feeling this way. Heck, I would feel the same if I hired a Realtor, agreed upon a price, had my home put on the market and received a full priced offer within hours or even within a few days.
Some things that I have learned since representing home sellers and homebuyers since 1998 are:
- There is no guarantee additional offers will be received – Of course, when an offer comes in fast at full price, a person cannot help to think that if they would have waited, they would have gotten more and higher offers. This is never guaranteed and I have seen a seller not respond to an offer received in order to “wait” for other offers. Only to have no other offers come in and the “previous buyer” buy something else in the interim.
- Appraised value may be an issue – The appraiser’s value is no longer taken, as the word of god, without review. The appraisers have multiple eyes looking at their appraisal report for accuracy. The banks don’t lose money. They will not lend more for a home than it’s worth. Sold Comps are the only comparables given weight because they are factual. Apples to apples home comparisons are the only ones which appraisers use. It’s a mistake to believe that an appraiser will give more value to a home than it’s worth.
- The market could be shifting up or down – Real Estate markets are cyclic. They have periods of peaks, valleys and flats exhibited throughout the seasons. While everyone has an opinion as to where the real estate market will be, there are no guarantees. I have seen those who thought there was more “room” only to be disappointed. I have also seen the market turn in the opposite direction. There are many times the “bird in the hand” philosophy should be embraced.
- Offer received before time for additional exposure – Sometimes we have seen a home, even before the professional photos and open house, receive a full priced offer. This creates some doubt on behalf of most real estate sellers. Questions arise if they priced their home too low or if they are giving away their home. The best way around this thought is to ensure you are looking at solid comparables, those which have sold and which are within .5 mile and have closed escrow within the past 180 days. We always return to the value which will be established by the appraiser. If the home has been priced in accordance with FMV – fair market value, don’t look back.
- The appraisal report issued – There are three options a seller has when an appraisal report comes in at a value lower than the offering price or listing price.
- The seller can have their real estate agent go to the agent representing the buyer in order to have them make up the difference. The difference in cash between the value established by the appraiser and the amount which was offered on the home.
- The home seller can agree to meet the home buyer somewhere in between by mutual agreement. Meeting between the amount offered and the appraisers amount.
- If neither of those work out or are not agreed upon by the home seller, the seller can decide to cancel the transaction and go back onto the market and start over.
- FHA Loans and VA Loans – when the homebuyer is using one of these loan programs to purchase real estate, the specific home holds the specific appraisal report for 6 months. 180 days! If the home seller decides to go back onto the market due to the buyer not willing to meet or step up, a new buyer with the same type of loan will not have be able to have a different appraised amount for 180 days.
- Conventional Loans – if a homebuyer is using a conventional loan, the property does not get a case number. Therefore, in theory, additional appraisers may generate different values. However, my experience has shown that those “values” are going to be very close – from appraiser to appraiser.
- Additional advertising and exposure – There have been times when homes have sold for full price before professional photos were able to be taken and prior to an open house being held. If a person has their eye on a neighborhood – the lack of professional photos will not dissuade them, I promise. Less than 1% of the real estate transactions occur between a homebuyer who has not seen the home in person. – Over 99% of home buyers will look at a home in person, even if the most beautiful photos have been posted online. Open Houses – Less than 1% of the homes for sale sell as a result of an open house. While the theory of 6 degrees of separation may apply, open houses are mostly beneficial for “agents advertising themselves”.
I’m Connor with HONOR and my RE/MAX offices are Headquartered in the Santa Clarita Valley. I have been selling real estate, representing buyers and sellers of homes since 1998 and I’m glad to be at your service.
Please reach out to me when you are ready for my representation and I hope that this real estate article has been of assistance when it comes to pricing your real estate and other feelings that come up as a result of received offers on the home you are selling.