Do You Wonder if Your Home Sales Price Was High Enough?
When a home sells too fast, sellers and buyers can become suspicious
Sellers are often astonished when a house sells in one day. The first place they tend to jump after the excitement of selling has lost some of its oomph is the land of "our sales price was not high enough." Sellers often begin to wonder if they priced the home too low because it sold too fast for them. They become suspicious. Some wonder if their real estate agent was in cahoots with the buyer because, otherwise, in the seller's mind, how did it sell so fast?
While all of that anxiety and uncertainty is brewing with the seller, imagine what's going on with the buyer—probably an identical scenario. As the seller is parading back and forth, wearing thin a path on the floor, waving fists in the air and building a case against closing the sale because they believe money was left on the table, the buyers are freaking out as well. No joke.
The buyers are questioning whether they paid too much because the seller accepted the offer so quickly. The buyers figure if they had offered less, the seller might have taken that amount, so therefore they conclude that they paid too much for the home, and they begin to berate themselves and point accusing fingers at their own real estate agent. They might believe their agent should have advised them to offer a lower amount, so it's mostly their agent's fault.
Both parties might start to seriously contemplate canceling the purchase contract or otherwise consider renegotiating the sales price. This is where the value of an experienced real estate agent can become apparent. Here are a few things to consider when you wonder why a home sold in one day.
Type of Real Estate Market
First, it is very common for a well-priced home to immediately sell in a seller's real estate market. If there are very few homes available for sale—a shortage of inventory—many homes will quickly sell simply because there is little to buy. The homes that are listed appropriately, within the prices of comparable sales, will sell much faster than overpriced homes. Homes that are overpriced might not sell at all.
On the other hand, if it's a buyer's market with lots of homes for sale, unless there is something very special about the home that sets it apart from all of the others, it would be somewhat odd to sell the home in one day. It very well could be priced under the market, however, if a full-price offer quickly arrives. In that case, a seller might want to wait a day or two to see if other offers follow suit. If there are no other offers, then the market has shown you that it is priced right.
Sometimes, though, a home that sells in one day is simply a fluke. A seller can put a home on the market at the exact same time the perfect buyer is actively hunting for a home just like that particular property. It happens. Don't rule out the coincidence. On top of this, it's also common for the first offer to be the best offer, so don't lose that best offer due to a misconception that the first offer is always the lowest.
Your Listing Agent Didn't Just Stick a Sign in the Yard
If you're a seller, it's easy to forget about the lengthy preparations for sale and overlook or not fully understand the amount of work your listing agent has put into getting your home ready for the market. They might have spent hours studying the market, previewing similar homes and preparing listing presentation materials just to win the listing from competitors.
Then, you've got to get your home cleaned up, spruced up, shining from top to bottom, decluttered, perhaps even employ a bit of home staging, and all of that activity occurred over the weeks leading up to the on-market date. Flyers have been prepared. Open house dates probably set. Advertising and marketing materials generated. Websites set up, professional photographs shot, until finally your home listing is entered into the MLS. Weeks or months might have passed by as you got ready to sell your home.
If a buyer showed up on the first day, it was probably due to these efforts, so don't discount them.
Buyers Obtaining Financing Will Get an Appraisal
It's not to say you can't overpay as a buyer, especially if you are not familiar first-hand with the neighborhood into which you are buying, but the sales price will most likely need to appraised by the bank's appraiser. That's a bit of added insurance for the buyer that the price is within reason. You can ask your buyer's agent to give you comparable sales data that will support the sales price you and the seller agreed to. It will help to give you peace of mind.
Picture yourself 5 or 10 years down the road. Whether you have saved $1,000 or so here or there on the purchase of your home will not be important at that time. The emphasis you might be feeling could be misplaced. What's important is that you bought the home you wanted to buy, it fits your needs, and you're happy with your new residence. If you were able to find that home in one day, congratulations.
At the time of writing, Elizabeth Weintraub, BRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.