In the current market, when a buyer makes an offer on a property, it is in the seller’s best interest to respond quickly. The buyers today are not impulsive, frenzied, or in a panic to “buy now or be priced out forever.” If any urgency is felt by a buyer, it is more likely based on interest rates rising.
The standard contract in California provides an expiration date of 3 days after an offer is signed. That doesn’t mean that the seller should take their sweet time to make a decision. I have seen buyers go through a careful thought process to first decide to make an offer at all, and then to come up with the terms and price that would make them happy with the results. At the time an offer is signed, most buyers are looking forward to coming to a conclusion of their home search, and moving forward with their plans to move in, arrange furniture, get settled in, and basically get on with their life.
During the wait time, between offer and response, the buyer’s emotions may swing substantially while imagining the offer being accepted, rejected or countered. Since nobody likes rejection, a defensive “I don’t really care that much” attitude often develops. At the same time, the buyer may also be mentally justifying their original offer and while it originally may have been a strategy to negotiate to a “middle ground,” it can evolve into a “they can take it or leave it” decision.
While dragging out a decision by the seller, there is also the chance that another home will become available that will be more attractive to that buyer.
Sometimes, it is difficult to respond immediately because one or more of the sellers may be unavailable to review and consider the offer, but with email and fax machines available from almost any corner of the globe, availability should not be an excuse for long. Unless the home is brand new on the market, the listing agent should keep the seller well-informed and prepared by having regular discussions about what to expect and how to respond. Providing information to the seller about agent feedback, recent sales (the ones that buyers bought, instead of yours), new listings, local foreclosures, buyer activity level and interest rates should be an important part of a listing agent’s job.
Several years ago, I worked with some buyers who submitted an offer on a newly-listed , but substantially over-priced property. (We justified the offer price with recent comps, many of which my buyers had visited.) The listing agent was in no hurry to help the sellers make a timely decision, but they eventually countered 3 days later. By then, my buyers were mad that their offer was treated so casually. They decided to keep looking, ended up buying a different house, and 6 months later the original house sold for $15,000 less than my buyer had offered!
Sellers – You have had your home on the market because you said you want to move. When an offer comes in, it should not be a surprise – that’s why you’ve let all these strangers come through your house. When you get an offer, thank the buyer (no matter what, it’s still better than not getting an offer) and tell them whether or not you want to sell at the price they offered. Dragging it out will only hurt you in the end!