This past week a single family home came on the market in the Uptown area of New Orleans. This property had many showings and received several offers with one being all cash and over the asking price. The seller decided to take the offer. What’s wrong with that?
Well, on the one hand you could say nothing because at face value it looks like a stellar sale. One day, all cash and more than she was asking. However there is another way to look at this.
This property got multiple showings and offers which means it was priced based on the comparables available at the time the home was listed however the market may be in an upward swing and that would mean the com parables are low. When agents price a home they can only come to an owner with a suggested value because agents may price a home but the buying public, the people putting the money on the table, are the ones who determine the price. As an example if we price your home at $350,000 based on the comparable sales in the past 6 months we have no way to know how many buyers are out there in this range, how many buyers are out there that are looking for your type of property, no way to know how many buyers want your location and lastly we don’t know what it might be worth to a buyer looking. There are many factors that can drive a price, market factors, time of year, relocation deadlines, school entry issues and so forth, issues that are unknowns. Did your agent factor in the absorption rate for example to see which the market is heading?
So why not let the market factors play out. Why accept an offer and think it is wonderful when many buyers never even got to view your home much less bid on it. There are buyers who will pay well above an asking price which remember is just a suggest price from your agent. Why not negotiate. Why not review your offers and negotiate the highest and best price. If many buyers never got to see your property you will never know how much higher the price could have gone. If many buyers never got to see your property you are selling it for the broker price opinion rather than what the market can bear without considering market fluctuations.
So, sold in one day, all cash and over the asking price is not necessarily the best deal you can make.