Last week, I explained why I think open houses are in the interest of real estate listing agents, not real estate sellers. Today, I want to express the same caution about bidding wars. When a property sells over a weekend in a bidding war, the seller gets the best buyer and the best price right? Maybe not. The fast sale benefits the marketing (listing) agent; it only benefits the seller if the short marketing period yields the best possible price and terms and a trouble-free selling experience.
Currently in the Boston area market, there are more qualified buyers than there are well-located, good houses and condos. This is a seller’s market. If the property is average or above average, there will be buyers for it. Yes, properties are selling themselves, unless the seller makes a mistake in the marketing. (These mistakes include overpricing it or failing to do basic things to make it appealing. I will tackle these at a later date on this blog.) It is a good time to be a seller here!
There are markets where creating pressure helps get sales going, but this spring is not one of those markets, here around Boston. In a market like this, there is no need to push buyers into making offers; they will make them. Sellers can afford to be picky about which offer they accept; they can get a reasonable, even good, price. By rushing the buyers, sellers encourage shoddy decision making. Shoddy decision making can lead to buyers having regrets, buyers backing out, or buyers feeling grudgingly about what they are paying. Any of these things needlessly add to your stress, as a seller.
Why the rush?
Properties that are shown for only one weekend rule out any serious buyer who happens to not be available for those couple of days. Instead, an open house is held when the doors are open to any and all people — qualified buyers and nosy neighbors. As a seller, are you really happy that 100 strangers came through your house in one day?
Open houses are not conducive to buyers making reasoned decisions. Could you see your own house objectively, if you only saw it once and there were 15 people in your kitchen? This kind of chaos and rush can lead to buyers who later get cold feet.
Who is really benefiting from a three-day showing cycle before offers are presented, en masse?
The benefit of longer time-frames, in this market, is that it encourages a solid decision by the buyers. It is not uncommon for rushed sales to fall apart. When that happens, the listing agents say something meaningless, like “the buyers got cold feet.” Buyers will then be suspicious that there is something wrong with the house or with you, the seller.
Rushed weekend sales cause buyers to make offers before fully thinking things through. This leads to regrets. A longer time-frame between seeing a property and making an offer may weed out some buyers. Yes, some will not make an offer after doing their due diligence. But, there are enough qualified buyers for you to wait for those who are reasoned and sure. Then, the quality of the offers you receive are likely to be better.
With a longer time-frame, the offers you get will be more likely to get to the closing table. They are more likely to be cordial. That’s what a sellers really wants, in the end, right? Not only the right price, but a good experience.