Some brokers faced with tight inventory have been reaching out to owners of properties that are not listed for sale in an effort to meet their buyers’ needs.
I admire their enterprise, but consider the implications for a seller who decides to entertain an unsolicited purchase offer.
First, they have to conclude whether they need professional assistance to evaluate the offer and the buyer. If they depend on the buyer’s representative, however, they have to confront the issue of divided loyalty in likely a dual agency arrangement.
Should such sellers decide to rely on an attorney for help, then they’ll have to accept the limitations of a lawyer versus a real estate broker for the transaction.
I’ll always maintain that a good real estate broker is the best source of valuing a property partly because of access to the most up-to-date and reliable statistics, even for apartments that have gone into contract too soon to have been recorded.
When it comes to negotiating the price (and other terms), sellers in this situation tend to be unrealistic.
What starts out as an amiable conversion of mutual interest may well become a fractious dispute that doesn’t end well.
To me, the most difficult hurdle revolves around the property’s value in a different respect: With only one offer in hand and only one prospective buyer to have seen the home, how is anyone to know what price the market ultimately could bear?
If the apartment or townhouse is exposed to the widest likely market, the result for the seller may well be a higher price than ever might be achieved via an unsolicted offer.
Maybe someone whose ailing mother lives in the building will pay a premium above the property’s intrinsic value. Maybe it will be someone who works a block away. Maybe it will be a prospective buyer for whom the place evokes an irresistible nostalgic tug.
I hardly can blame a seller who fails to resist temptation and takes the easy way out, literally, but doing so may easily come at a price.
Tomorrow: Size matters
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Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022