It’s all too easy for sellers to get a false sense of confidence from early offers and ignore them, waiting for higher bids in the months to come … or just get spooked altogether. We often have conversations with sellers about the critical first 3-4 weeks that a property is listed on the market, and why it is so important to treat buyer interest and offers with respect during this time.
Let’s dig into this dynamic and break down why this happens: what makes those first few weeks so magical? We’ll use round numbers to communicate the point.
- Let’s assume that at any point in time, there are 100 active buyers in the market, with 10 of them exiting (via purchase or otherwise) and 10 of them entering the buyer pool.
- Those buyers are quickly aware of any new listings that come online, having already considered previously existing inventory. Therefore, you have the potential of that entire pool seeing your property, considering it, and perhaps bidding on it.
- What happens after that first month on the market when this pool of existing buyers is already aware of your property? 10 drop out and 10 new ones come in. Now, instead of 100 new eyeballs you have 10 new ones. The chances of generating the same level of traffic and offers as in those first 3-4 weeks are quite slim.
Further, sellers who hold out for a better response down the road neglect the cumulative carrying cost of the property and its impact. Those 6 months on the market (now average for NYC apartments) translate into roughly a 5% difference in the selling price in terms of monthly carrying costs (your mortgage, real estate taxes, maintenance costs, etc.). Not lost money, to be sure, if you’re living in the home … just putting it into perspective.
Lastly, bids that come in later down the road are almost always lower than those initial ones. PLUS we’re not going to see an upward explosion of prices any time soon, meaning the longer your property stays on the market, the greater the chances of your getting less for it.
Bottom line: don’t get over-confident and be sure to have a strategy in place for the first few weeks when those offers come in.