Is your agent recommending selling off-market or straight after your first open home?
In a hot market, the days following your first open home are critical to ensuring that you negotiate the highest possible price for your home! The rules of negotiation in a hot market are completely different to selling in a cold market. This is because in a hot market you have an abundance of buyers and in a cold market you have limited numbers of buyers. Negotiation is about leverage and leverage is competition. This is exactly why in a hot market you shouldn’t negotiate the same way you would in a cold market.
For example, I recently sold a property at 20 Winter Avenue, Kellyville. There were 59 buyer inspections at the first open home. I received three offers directly after the first open home ranging from $1,230,000 – $1,275,000.
Now, if the owner decided to sell on the same day as the first open home, the best offer that was on the table was $1,275,000.
In a cold market where offers are few and far between and competition is low, you would be inclined to accept this offer, however in a hot market there are 56 other potential buyers that haven’t yet been given an opportunity to make an offer, let alone make their highest and best offer under competitive conditions.
Remember, competition is leverage when it comes to negotiating, so you need to use that leverage to increase the value of your home.
In the case of 20 Winter Avenue, after speaking to all 59 groups of buyers and 4 days later, I was able to receive the highest and best offers from 17 different buyers ranging from $1,230,000 – $1,436,000. We sold the property unconditionally in 10 days for a massive $1,436,000, a whopping $161,000 more than the highest offer received on the day of our first open home.
Yes, this was an extra 4 days of work put towards selling the property, but isn’t this what you actually pay an agent for? I could have sold it quickly and saved myself time and resources, but it would have cost my client $161,000.
People say that you need a good agent in a bad market, but what they often don’t realise is that you need a great agent in a hot market because the stakes are high and it could cost you $100,000’s of dollars.