Oct. 23, 2006 - Asking Price vs. Acceptable Price

Once you have determined the optimal asking price for your home, you need to run through potential offer scenarios to determine the acceptable sale price and terms of an eventual offer.  Don't wait until you have an offer in your hand.  Run through a series of "What Ifs" beforehand.

Note to agents:  Do not leave the seller's house until you have run through various scenarios of likely offers.  You need to know if the owner is prepared if they get an offer that is LESS than full price.  Don't be surprised!  If you settle on an asking price of $799,000, ask what they will do if they receive an offer of $790,000.  You and I may think it is obvious that an owner would accept an offer of $790,000 if they are asking $799,000, but do not assume that and do not wait for the offer, to test the seller's expectation of full price.

If you have an offer of $790,000 in the first 48 hours, and have heard other agents say their clients "may be" writing an offer, of course you may consider countering at full price.  But if 20 buyers have come and gone with NO interest whatsoever, and you receive an offer of $790,000, and lose it by countering at $795,000?  $799,000 should, at minimum, mean $790,000 or better.  Does it matter if they are a cash offer?  Does it matter if they close faster?  Does it matter whether or not they are making the sale contingent on a home inspection?  Price and terms.

Every once in a while I run into a seller who expects to get the exact asking price.  It is my job to ascertain that, before the property goes on market.  I can either talk to the seller about being willing to take something less than the asking price, before the property goes on market, or raise the asking price before it goes on market to allow room for a win-win negotiation.

Nov. 25, 2006 - re: Asking Price vs. Acceptable Price

In many cases, I will write into the listing contract the "seller's minimum acceptable price" - this isn't published anywhere of course, but it does put into the contract what the seller will accept so that should an offer lower than list come in, the seller is prepared at that point. Some sellers are ok with this and some aren't. It's all how one couches it, I think.

Michael Trust

www.MichaelTrustRealty.com

Nov. 25, 2006 - re: Asking Price vs. Acceptable Price

I don't think that would work well here, Michael.  We have Designated Agency where one person in the office could represent the seller and another represent the buyer.  I don't think I'd be comfortable having the seller's bottom line in writing in one of the office drawers.  Even if it were a locked drawer, there would be too much potential for a future "Buyer Agent" of the property to have seen it.  OR for the seller to THINK the buyer agent may have seen it.

In CA, of course, where you are, it legally wouldn't fall that way.  But most active listing drawers are fairly available during the hours the office is open.  Not much to prevent an agent in your office from having seen that, if they have a buyer for the property.

As a seller, knowing what I know about office paperwork, I don't think I'd go for that.