When it comes time to buy or sell your home, you have to be prepared to negotiate. You may get lucky if the person on the other side of the table offers you everything you want, but that doesn’t happen too often. Most of the time, you’ll have to decide if you should take an offer that’s close to what you want, but not perfect. How do you make this decision? 

We had this exact conversation with a client of ours this week. She bought a new home and needed to sell her existing home. It was on the market for about 6 weeks and she had received two low ball offers which she refused (and rightly so). The third offer she received was better. The price was in the ballpark of fair market value and the closing date was good, but she had hoped for a higher price. After a few rounds of negotiations, the buyer submitted his final offer. Our client had to decide if she should accept it or reject it. (She could have signed it back, but because we believed that this really was the buyer’s final offer, signing it back was equivalent to rejecting it.)

We asked our client 8 questions to help her make the right decision:

1. Do you absolutely need a higher price or you won’t be able to afford your new home? In this case, the price on offer was high enough to allow her to afford her new home.

2. Is the price being offered reasonable? It was.

3. Is there a concrete reason behind the higher price you’d like or is the higher price a target you set for yourself? It was a target price based on some comparable sales.

4. What are the chances of you getting a higher offer? Possible, but not great. What are the chances of you getting a lower offer? More likely.

5. How do you feel about continuing to keep your home clean and staying out during appointments? She was getting tired of the hassle, which is how most people feel. 

6. Will you be disappointed if you reject this offer and have to accept a lower offer in a couple weeks or will you be able to say “them’s the breaks”? She was pretty even keeled and logical about everything, but it would’ve been hard not to feel disappointed. 

7. If you accept this offer, are you going to regret not holding out for more money? A little, but that’s normal.

8. How long can you afford to wait for a better offer? Maybe a few more weeks. 

There’s no right or wrong decision in this type of situation. In this case, our client decided to accept the offer. Overall, it was a good offer. The chance of receiving a higher price wasn’t as great as the chance of receiving more low ball offers. Further, if someone did eventually offer a higher price, it wouldn’t be much higher than what she had in front of her, but a low ball offer might be for considerably less. She knew that a bird in the hand is worth two in the bush (see It’s Not Over ‘Til It’s Over).

In our opinion, she made the right decision. She weighed the pros and cons and kept her ego out of her decision. (Advice: don’t get hung up on non-crucial price targets. Take a look at Pigs Get Fat and Hogs Get…...) Further proof that she made the right decision appeared the next day when a home that was similar but slightly superior to hers was listed for the same price as hers. If given the choice, most buyers would choose this other home so the likelihood of her receiving a better offer than the one she accepted declined even more.

If you’re looking for this kind of advice to help you make the decisions that are best for YOU, make sure to subscribe to this blog.  Or feel free to contact me anytime to discuss your own personal situation. I’m always happy to help.