This is the third post on this subject, otherwise known as “He Who Hesitates May Get Lost”. You’ll remember that Part 1 was about the second buyer who appeared out of nowhere at 11:30 pm just as the seller was about to accept my client’s offer and Part 2 was about the negotiations that carried on over the course of an entire year.

You probably already get the message that residential real estate exists in its own strange world in which anything can happen at any point in time, which is why you shouldn’t hesitate. If you see it and like it, buy it. And if you receive a good offer for your home, take it.

But I can’t honestly tell you that this rule is carved in stone like one of the Ten Commandments. Sometimes moving quickly pays off and sometimes it’s better to take a step back and hesitate. Let’s look at an example to see why this is so.

After a fairly long search, Janie and Jimmy finally find a home they want to buy. Problem is that Sammy and Sandy’s list price is way too high. Their home is listed at $1,500,000 and most of the comparable sales have been in the $1,400,000 to $1,450,000 range. Janie and Jimmy feel that the home probably sits somewhere in the middle of that range because it’s not in the best location and isn’t as large as some of the other comparables. Sammy and Sandy feel that their home is the best home ever built and that it’s worth well more than any comparable home.

Janie and Jimmy submit an offer and after several rounds of negotiations, here’s where things stand:

Sammy and Sandy won’t take a penny less than $1,475,000 and Janie and Jimmy won’t pay a penny more than $1,450,000, which is more than they think the home is worth, but they like it a lot. Janie and Jimmy walk away from the negotiations, hoping that the home will stay on the market until Sammy and Sandy realize that it’s overpriced. Janie and Jimmy like the home and are prepared to pay a bit of a premium for it, but they’re not prepared to overpay for it by THAT much and are willing to take the risk that someone else might buy it before Sammy and Sandy are willing to accept a lower price. Sammy and Sandy walk away from the negotiations hoping that another buyer will come along who’s willing to pay them their inflated price before they feel the need to reduce their expectations.

If you’re thinking ahead, you’ve probably already figured out that this fairy tale can only have a happy ending for one of these couples.

About a week later, Sammy and Sandy receive another offer. When faced with this news, Janie and Jimmy realize how much they love this home and decide to resubmit their offer, this time for $1,475,000. Unfortunately, the other buyers offer a higher price so Janie and Jimmy don’t get their dream home. In hindsight, hesitating didn’t pay off for Janie and Jimmy. They saw it, they liked it and they should have bought it.

Janie and Jimmy were disappointed and felt they had made a mistake by not paying $1,475,000 right off the bat, but I don’t think they made a mistake. At the time of their first offer, they did what they felt was the right thing to do under the circumstances. Had they paid $1,475,000 for it during the initial negotiations, at a time when they believed it was worth approximately $1,425,000, who’s to say they wouldn’t have felt like they overpaid for it and regretted that decision for as long as they owned the home?

But hesitating certainly paid off for Sammy and Sandy, who were elated when the second buyers came along. But how do you think they would have felt if they never received that second offer so soon, if Janie and Jimmy bought another home the next day and if the only other offer they ever received was for $1,350,000 and it came four months after Janie and Jimmy’s original offer?

As you can see, it doesn’t matter if you’re buying or selling, there are risks inherent in playing the waiting game. If you can live with the offer that’s in front of you, then go for it – You See It, You Like It, You Buy It. If you think you’ll regret going for it, then don’t. There’s really no right answer.The most important thing to do is to examine the risks and rewards associated with each course of action and then make the decision that’s best for you under the circumstances.