I’m joking, right? You would think so, except this has happened to me twice.
If you decide to list your home for sale with me, we will review similar properties that are currently for sale and recently sold. We will discuss market trends: are prices trending up, down or neutral? We will compare your property against the others based on age, condition, finish level and size. We will decide on a reasonable list price and a reasonable sale price. If you are a buyer and identify a property you wish to purchase, the process is exactly the same. Buyers, sellers and appraisers determine value by comparing the subject property to other active and sold properties.
Before completing listing documents, my sellers and I go through this process. Then, the property goes live on the MLS. A few years ago I had a buyer looking to purchase a condominium in a specific development. I told her that I was getting ready to list a condo in that development. She was out of town but sent another family member to preview the condo and my buyer wrote a full priced cash offer. I had reviewed the same sales with my buyer that I reviewed with the seller and the buyer knew the listing price was fair. She knew it wasn’t a “steal”, but it was reasonable.
I’ll never forget the day I presented that offer to my seller. She was not happy. She second guessed everything and asked me to counter all kinds of terms besides the price. Eventually the condo closed and it worked out.
Recently, I wrote a full priced, cash offer on behalf of a buyer. The condo was not on the market. I found this condominium due to my relationship with another agent who was very active in that project. His seller prepared a counter-offer changing the closing date and other terms. Would you believe it took 4 addenda before we came to agreement?
There are many psychological issues at play here. Trust is a big one. There are also some people who look at the negotiation as win/lose instead of win/win. If the buyer writes a full price offer, some sellers feel like that’s not good enough for a “win”. They need to extract some concessions, even if those concessions are minor terms that might blow up the transaction.
If you are buying or selling a home, it’s a good idea to ask yourself in advance what will happen if there is a full price offer. Don’t assume it will be accepted.