The art of negotiation is fickle and nuanced. A lot of the time it’s important to use your gut instincts and get creative in order to get what you want. Like with anything, however, there are certain principles that are sacrosanct and need to be employed, such as “never accept the first offer.”
Anyone who knows anything about negotiating knows that the first offer is usually a lowball offer. Whoever is making the offer knows that no matter what number they put out there, there’s very little reason to expect the seller to accept it. This forces them to purposely make an offer below what they think is fair in order to eventually get close to something realistic.
While real estate negotiations are similar to other forms of negotiating, there are many aspects that set it apart, as any good real estate agent knows. One such aspect is when to accept the first offer.
Generally, unless the first offer is irrationally high, the best thing to do is field offers from other potential buyers to better gauge what the market dictates you can get for your home and in ideal scenarios, precipitate bidding wars. However, because the real estate game is unlike any other game, there are scenarios in which accepting the first offer is a good idea.
1. After Finding Your New Home
In real estate, most purchases are made with contingencies that the buyer sell their house first, as not to be forced to carry two mortgages and a whole host of other potential complications. If you’ve already found your new home and you’re not getting a lot of bites on your current home, this is a scenario in which it may be a good idea to accept the first offer, provided it’s reasonable. The last thing you want to do is put the deal on your new home in jeopardy, finding the right home isn’t easy.
2. Relocating For Work
Relocating for a new job opportunity can be exciting, but is generally very nerve-racking. It’s not easy leaving your hometown for somewhere unfamiliar and coordinating all the necessary logistical aspects for a smooth transition. Compounding that stress with a complex home sale is not a good idea. Provided the first offer is reasonable, take it. There are many other things you’ll be inundated with during this stressful chapter in your life.
3. Cash Offer
Did someone say cash? Accepting a cash offer circumvents many of the issues associated with a complicated closing, like not having to wait for the loan to be approved. Additionally, if someone has that much money on hand, they’re likely not buying on the contingency that they sell their old residence, eliminating uncertainty and complications associated with them selling their current home. As long as the offer is reasonable, accept it, it will make your life easier by simplifying an already complex transaction.