“Did you know that if you receive only one offer on your property, that the probability that it will close is 90 percent. If you have multiple offers, the probability that you will close is only 50 percent…”
I heard this statistic this week in a negotiating training run by Bernice L. Ross. I queried Ms. Ross about that figure. She said that nationally, the difference is that much.
I asked her why. In a wide paraphrase, she said that an agent’s job does not end when an Offer to Purchase is signed. For the listing agent, as well as the buyer’s agent, the signed Offer is the beginning of the relationship. When the relationship starts out with stress and competition, it can lead to a shaky transaction and buyers who back out.
Buyers are getting beaten up in this market. After making several rejected Offers — on short time-lines — they begin to make Offers without bonding to the house. Then — surprised that they have a signed Offer — they look more skeptically at the house they rushed into. Therein lies the root of emotional purchases and increased buyer back-outs.
Ms. Ross thought the short time-lines created instability in relationships. She advised the listing agents in the room to slow it down. By slowing it down, the tenor of the transaction can be more stable and more easily mediated by a real estate professional. When emotions are running high, no one wins. When properties go under agreement quickly, then come back on the market, buyers wonder what is wrong with the property. Your chance, as a seller, to get your best price has now been diminished.
Another concern about the super-heated market
In other parts of the country, buyers are practicing what is called “deal doctoring”. In hot markets, like ours, buyers are securing accepted Offers but continuing to shop for other houses. Ms. Ross writes, “Buyers are tying up one property, then continuing to make offers on other properties in the hopes of obtaining a better deal or a better property. If they find a deal that’s good enough, they will forfeit their deposit and walk away from other offers.” There was a wave of that happening in Cambridge last year with cash buyers.