It’s January 2022 and the Olympia, Washington real estate market is in a deep seller’s market fueled by low supply (as of this writing, all of Thurston County had just 150 homes listed for sale) and high buyer demand. This is creating an environment where many listings are receiving multiple, competing offers that are pushing up sales prices.
I think just about everyone understands this basic concept of supply and demand but there seems to be a disconnect with sellers. The key takeaway is buyer competition is pushing up sales prices for sellers. Therefore:
Why would sellers accept the first offer they receive?
First, let’s talk about the options sellers have when they list their homes. In our MLS, sellers can choose to either “review offers upon receipt” or “review offers on the Offer Review Date” and list a future review date.
For example, if the home is listed on Thursday, the seller will allow showings through Sunday and then will review offers on Monday. This can give good exposure to the market so that buyers have a chance to see the home and sellers can get the most for their home.
This choice is stated in the listing so everyone is put on notice when the seller plans to review offers but the other part of this is the seller has the choice to accept an offer prior to the review date. To me, this is a win-win for the seller. Why would a seller not want to expose the home to as many buyers as possible, get the highest price possible, and have the option to accept an offer prior to the review date?
What the Data Shows
The sales data shows that sellers who are patient and accept an offer two to five days after their list date make substantially more money from their home sale than sellers who accept an offer the first day they are on the market.
In looking at the last sixty days of sales activity, sellers who accepted the first offer achieved, on average, just over 1% over their asking price while sellers who waited at least 2 to 5 days to accept an offer were able to get nearly 5% over their asking price. This amounts to $6,200 versus $23,000 over the asking price.
Anecdotally, one of my recent listings achieved nearly 8% over the asking price and all the seller did was to wait.
The first offer we had in hand was in fact a winning offer and was the best offer for several days. It was 4.76% over the asking price but on the last day of showings, on day 5, we received an offer that was $15,000 more than that one. For five days of showings, the seller made an additional $40,000 over their list price and the only thing they did to get more money was to have a little patience.
Why are sellers not waiting and instead taking the first offer?
I can understand that sellers don’t want to deal with the hassle of showings. It is a pain while you are still living in the house to prep it for showings and to leave the house. Nowadays with more and more people working from home and sometimes kids are at home for school, too, it is challenging.
But if these sellers were asked the question, “would you rather make $6,200 more than your asking price and have your home on the market for a few hours or would you rather make $23,000 more and the only thing you had to do was to have your home on the market for a couple of extra days? Which would you choose?” Most sellers, if presented with this choice, probably would take the more-money option.
My concern is sellers are not being offered this choice and aren’t getting the sales data and therefore, may not be capitalizing on this historic seller’s market.
Curiosity Killed the Realtor
Sometimes I ask too many questions but I do have an honest curiosity!
I asked a few listing agents who didn’t have a review date why they were doing this, and let’s just say my question didn’t really go over so well. They were a little defensive (understandably) but for those who didn’t tell me to take a flying leap into Puget Sound, I did get an interesting response. None of the agents said their sellers had issues with showings or being on the market for a few days; they instead told me they (the listing broker) didn’t want to deal with all the buyer agent calls and inquiries, and since they had a few offers in hand, why wait. They were hired to sell the property, not just to list the property.
If you are a seller, this is not the answer you want to hear from your listing broker. In fact, this response is a violation of the laws in Washington State that govern how brokers are to work with sellers. The very first sentence of the code states listing brokers are “to be loyal to the seller by taking no action that is adverse or detrimental to the seller’s interest in a transaction.”
I think for a listing broker not wanting to be bothered by buyer agents and all the phone calls, text messages and emails is not serving the seller but instead serving the listing broker. If the seller wants to accept an offer within hours of listing, that is the seller’s choice – not the listing broker’s choice.
How Buyers Can Benefit from Impatient Sellers
I admit I get frustrated when I see sellers choose the option of reviewing offers upon receipt because I and my buyers may not be able to get out to see the property that day or if it is a really hot property, there may not be any appointments left. But there is a bright side to this scenario that can work out for buyers.
If the seller is planning on reviewing offers on the first day of the listing, there is usually a flurry of activity and most likely the seller will receive offers on that first day. I will advise my buyers to offer just a little over the list price to entice the seller enough to accept their offer immediately and before a larger crowd of other buyers come along and submit offers.
This is great for buyers who are not going to overbid a property by tens of thousands of dollars. Buyers can take advantage of sellers who choose to have a short window for showings and accepting an offer.
My advice for buyers in this market is to tour homes as quickly as you can and be ready to submit an offer immediately, especially if there is no review date. Even if a review date is offered, I would still not delay in submitting an offer because the seller can select an offer prior to their review date.
The Choice is Yours
I have sold my own homes and for my last home sale, because of my living arrangement, it would have been very difficult to tolerate showings. But I knew what I was trading off by not exposing my home to the market.
Although your listing broker should be able to come up with solutions to make listing and showing your home easier on you, for some, having several days of showings is too much of a hardship. All sellers will have different circumstances and tolerance levels. My goal is to give all my clients choices and options so they can make the best decisions.
In the end, although this is a seller’s market, it isn’t an easy market for sellers. Don’t go it alone! If you are planning on selling or buying in the Olympia, WA real estate market, contact me today and let’s talk.
VIDEO: Why are sellers giving up thousands of dollars in this market? (And find out how buyers can benefit.)
Unless otherwise noted, statistics compiled by Coldwell Banker Evergreen Olympic Realty and Francine Viola from NWMLS data. Statistics not published or compiled by NWMLS.
Unless otherwise noted, statistics based on our own proprietary market study. Information and statistics derived from NWMLS.