Cancel that Open House!!

When does it make sense for a home seller to take that first offer and cancel the open houses?

It happens all the time. A seller gets an aggressive offer in advance of the first weekend’s open houses with a fast expiration timeline. Sellers (should) ask themselves: Is this the best offer I can expect?

The answer to that question generally lies in the answer to a few follow up questions your listing agent should be able to answer:

What has the activity level been? Has it been well advertised from the onset? Are there indications that this particular buyer won’t wait?

This chart below is pretty telling:

I took 15 years worth of MLS data and averaged the sale-to-list and sale-to-original price ratios for each day on the market until an offer is accepted. The golden line indicates how far above or below the original price the sale price landed. The blue line is the sale price distance from the original price. They are largely in lock-step for the first couple of weeks. What’s interesting is that even when list prices are lowered, on average, the final sale prices still tend to come in below.

Where’s the sweet spot? It will largely depend on the answers to those questions above, but generally, it’s NOT within the first 96 hours of a listing’s lifespan. The sale-price-to-list-price ratio peaks right around 6 days.

Even though we live in an age when information, such as listings for sale, is immediate, it still takes time, in real life, to coordinate an in-person showing. It still takes some modicum of time to make a big decision like buying a home. This suggests that taking offers within the first 1-4 days may not always get as much as if you gave it at least 5 days.

As a listing, from the moment I’ve launched the marketing plan for any listing, I’m closely monitoring and assessing the level of interest from a variety of different data points. Phone calls, website traffic, ad clicks, agent feedback, etc. From all these sources, we can intelligently assess how sharp the interest may be. If these areas reflect a low level of interest but there’s one hot-to-trot party considering putting an offer in early, I may strongly suggest to my seller that in this case it would be smart to take an early offer. For the record, in most cases I’m advising sellers to kindly rebuff an early offer in lieu of waiting for the weekend to play out.

The TLDR version of this is that it makes sense to give your listing a few days to breath on the market while the market takes note and makes plans to see it. Sure, there are going to be those aggressive buyers out there looking to snatch something up out of fear that another buyer will beat them to the punch, but this is where the expertise and insight your listing agent provides will be crucial to whether or not it makes sense to “take the money and run” or to stay pat until, at least, the weekend open houses and showing requests have played out.

I’ve got plenty of real examples where pushy buyers or pushy buyer agents tried to convince me or my sellers that their offer would be the best thing we’d see. I’m not saying it’s a guiding principle, but if someone is that pushy, I tend to read it as weakness or desperation. There are ways of handling this that don’t necessarily involve telling the interested party to pound sand, but that’s for another conversation.