When The First Offer Is The Best One

Should you accept the first offer on your home? This is a common question we hear from sellers. On the one hand, you might think it's worth holding out for a better offer, especially in a hot market. On the other hand, rejecting the first offer could be risky.

The truth is there are many instances when the first offer will be your best offer. Below, we'll discuss those reasons as well as give you some tips to consider when making your decision.

Should You Accept The First Offer?
Receiving the first offer is exciting. It serves as confirmation there is interest in the home, and it serves as a reasonable indicator that your home sale may be finalized in the not too distant future. So should you accept the offer or wait for another one to come along?

Unless the offer is significantly below your asking price, you should likely accept it. Here is why:

• The Offer Was Likely Carefully Calculated
  The buyer most likely consulted with their real estate agent, evaluated market data, and looked at comps (recent similar size home sales within a few miles of your home) when deciding on an offer. As a result, the offer is probably fair in most cases and based on research.
• You Can Always Negotiate 
  If the offer is within the ballpark of your asking price, you can always negotiate. Work with a real estate agent to respond with a counteroffer that has a higher price or eliminates some of the requested contingencies.
• Turning It Down Could Be Risky
  Sure, a better offer might come along. But what if one doesn't? You run the risk of your home sitting on the market for a long period of time, which might make buyers wonder if it has a problem.

Tips To Consider When Evaluating Your First Offer
Whether or not to accept the first offer isn't always a clear-cut decision. There are several factors you'll likely want to consider:

• The State Of The Market
  If the market is slow, it can be risky to wait for another offer to come along. However, if the market is hot in your area, it may be in your best interest to wait an extra day or two before responding to see how many additional offers come in.
• The Offer Price
  If an offer is within 5 percent of your asking price, then you know you're likely close enough to consider negotiating with the buyer.
• Contingencies
  If the buyer has undesirable contingencies that are non-negotiable, such as a home sale contingency, it might make sense to wait for another offer.
• Timing
  If the offer comes quickly, as in the first day or so the home is on the market, then you might have the luxury of waiting especially if you don't need to sell fast.
• The Transaction
  Is the buyer offering all cash, or are they financing the purchase through a mortgage? Cash offers close much faster. Consider how important your timeline is.

In many cases, the first offer is the best offer, and there can be downsides to waiting for better ones to come along. However, if the market is hot, the offer is low, or the buyer has unrealistic expectations, waiting a few days might be worthwhile.

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