Selling a home is a big deal and people tend not to do it very often. Owners decide to sell for all sorts of reasons, but what unites almost everyone is their desire to get the best price in the shortest amount of time. But every seller is slightly different, and is driven by a whole host of needs and desires, all of which have an effect on how they go about selling their home.
Given that no two homes are identical, it’s not surprising that there’s usually some deliberation over their value. Owners naturally put a higher price on their home than the buyer, and it’s only when they can agree that it gets sold. The following two pages look at the selling process; from a home first coming onto the market, to the vendor accepting an offer, or not.
Starting the conversation
Whenever it arrives, the first offer is a welcome expression of interest. It takes an average of 11 days between someone putting their home up for sale and them receiving their first offer, a figure which closely reflects the strength of demand in their market and the level at which the asking price is set. While it might be welcome, more often than not vendors turn down the first offer in the hope or expectation of getting a higher price.
In 2016, 71% of first offers were turned down, a figure which has dropped slightly since last year. London homeowners are more likely than anyone else to hold out for a higher offer in the future, turning down 82% of initial bids.
The length of time a home has been on the market tends to determine whether or not the first offer is accepted. Vendors turn down 80% of first offers made on homes that have been on the market for less than a week, while at the other end of the spectrum, 55% of opening offers are accepted on homes that have been for sale for at least six months.
So is turning down the first offer the right decision for most sellers? For the most part the answer is yes, with some exceptions. 78% of vendors who turned down the opening offer ended up with more money. A figure which varies depending on who’s making the second offer. If the person making the first offer comes back with a second, the vendor almost always achieves a higher price for their home. But if the first buyer walks away and it’s someone else making the second offer, their chances of getting more money drop to 61%. Quite often it’s the first buyer who walks through the door who is also the keenest.
The next article will be available on 22 November and will look at the research and data behind final offers.