Accept no offer until your home is on the market

The garden I tended behind my rowhouse in Washington, D.C.

How tempting it is when you get an unsolicited offer to sell your home before you put it on the market.

Maybe you’ll have no, or at least a reduced, brokerage fee. There’ll be no open houses that require your preparation and evacuation. And forget about the anxiety of waiting for a buyer to bite, conducting fruitful negotiations and wondering, “What if?”

Don’t do it.

The situation arises more often that you might imagine. Hell, it happened to me when I moved back to Manhattan from Washington, D.C.

But don’t do it.

There is ample for reason for rejecting an early offer or equivocating  should one surfaces: You can have no certainty that the offer you receive before your property is listed in broker databases would prove to be the best one.  In fact, probably it won’t be so.

“But, but, but. . . what if that buyer won’t wait?” you stammer.  Good riddance!

In the end, the buyer eager to engage in premature negotiation may keep raising the bar so that the transaction never closes.  If such an individual won’t stick around until after your home is listed, you can be reasonably sure the sale wouldn’t have worked out well anyway, if at all, certainly not at the most favorable price for you.

All you’d be giving up by waiting is the commission expense, and that likely would pale in comparison with the better price you’d receive by delaying.

The key to obtaining the best sum for your home is to expose its availability to the maximum number of qualified buyers. That’s axiomatic in real estate and just about every other kind of sale.

How well would a developer do at auction if only one bidder showed up? It’s a purely analogous situation.

Promulgating the listing publicly is marketing, and it invariably is the only way to get the best price for anything — whether a car, an old sofa or your home. Think eBay. It’s the difference between garage and online sales.

(Taking the firsts offer after a property has been well exposed to the buying public is another thing altogether, as I have written previously.  Conventional wisdom has it that the first offer generally proves to be the highest.)

As for my house in D.C., I owe you an explanation of why I sold the property without first listing it.

It happens that I had just sold the nearly identical house for a neighbor in the same row in which we lived between Dupont and Logan circles.  As a real estate broker there, I knew quite a lot about the market in 2006, and it also happens that I came to represent a couple who had placed second in a recent bidding war for that nearby property.

When I told them I was moving, their excitement was palpable — not, I think, because they were glad to get rid of me. They wanted my house!

My idea at the time was to hang onto it as an investment property. There was no need to extract my equity because I intended to rent here in New York. (I did that, but only for a year.)

The couple kept proposing a decent price, and I kept declining with a nod to Nancy Reagan. I really didn’t want to sell.

Finally, they made me an offer well in excess of the market and of the amount for which the Federal-style rowhouse down the street had sold.  So I broke my rule and unloaded the place. (I did likewise with my car, but it went to a friend for what I still think was a sum that we both felt was fair.)

My late father often advised me, “Do as I say, not as I do.” Good advice for you, as well, dear readers.

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Malcolm Carter
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022

M: 347-886-0248
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