There are four siblings involved in trying to sell a house. The Realtor has it listed a price that two of us feel is too low. His hope/plan is to have an offer at the open house the day the house is listed. It seems like this will trigger an aggressive buyer to either offer this lower list price or an even lower lowball offer. Can we hold out if an offer is less than the list price? So, this is the flip side to your article "Making an Offer Before the Open House." How can we remain open to higher offers without losing the buyer?
-Jake (area withheld)
Okay, there are several angles to the question and answer. First, good luck with the four siblings “trying” to sell a house! I have found over the years that trying to get four siblings, or fewer for that matter, to agree on anything if quite difficult. I come from a family where I have three older sisters and as you can guess unanimous agreement is as rare as a Yeti sighting! That being said, I believe the strategy of your real estate agent is a bit risky…by putting all his (your) eggs in the proverbial open house basket! For the purpose of this answer, I will assume that the home in question is being sold locally, as we do from time to time get questions submitted from outside our area and the location was not included with your question.
For anyone who has read this column for the past four or five years, you will know that I am not a huge fan of the traditional open house! Why am I not a fan of the open house? Simply put, they are not impactful at generating offers on the house being held open. Does this mean that they don’t work? No, it just means that in our market they are not very effective at creating a feeding frenzy type of atmosphere. I know, I also watch HGTV and see the open house frenzy at the end of each episode of Flip or Flop, Good Bones or Hometown. (BTW these are about the only kinds of shows, outside of football or hockey, that we watch at the Kimbrough house!) Unfortunately, I have just never seen it work this way… they call it reality tv, but it is far from any reality I have ever seen. Again, this does not mean it will not work, just means that the statistical chances are not high! If this magic open house does not work and you do not receive any offers at all or the offers you receive are from “low ballers” (any time I hear the word ballers I think of The Rock) you can certainly hold out for a higher price from another buyer on down the line. If you do receive an offer at your asking price and you do not accept, there may be some potential issues with agent commission being due, but that’s a question for a completely different column. The last part of your question is kind of like having your cake and eating it too! How can we hold out for higher offers and not lose our low-ball buyer? This answer is also simple…you can’t!
I have heard my mother say it many times…you are either pregnant or you are not! As it relates to real estate, you are either under contract or you are not! You cannot, at least no self-respecting buyer would allow you to shop their contract, be under contract with one buyer and still soliciting offers from other buyers that may be higher and then just go kick your current buyer out of bed! It just does not work that way…or maybe it does in some weird “reality” tv show! You need to list the home for a price you are willing to sell it at and then market it to solicit offers. An angle that we will use from time to time when we think there may be an unusually high demand for a property is to put it on the market and then hold any and all offers for a period of 5 days. This allows more than just an open house to take place, it allows a fair amount of market saturation to occur and the generation of traffic and interest in hopes to accumulate several offers where you end up with buyers competing for the property. At times this works great, but it works best when the property is unique, in a high demand price range or in a high demand area.
Ultimately you can look at this as any family would when there is dissent in the ranks…two of you are going to be right and two of you are going to be wrong! Sometimes being right is the only consolation you get!
Hope this helps.
The Kimbrough Team