What Happens When Sellers Reject a List Price Offer?
Is it smart for sellers to reject a list price offer? You might wonder why a person would put her home on the market and then turn down an offer at full list price or better. But it happens. You know why? One reason is the seller is mentally ill. I’ve certainly experienced a few of those. But much of the time it is because sellers harbor unrealistic views of how much their home is worth. They probably get that mindset from asking Uncle Joe or they wrongly trust Zillow estimates, and both are most likely widely inaccurate.
Or, they add up all the money they have ever put into the house. For some reason, sellers tend to believe improvements do not depreciate. That new kitchen 10 years later is not new. Further, if they put on a new roof several years ago and it cost $15,000, they think their home is worth $15,000 more. It pains me to say, it is not worth $15,000 more. Not on the day the roof was installed or even two years later. Because a roof is a maintenance item, not an improvement.
It might appear as an improvement to the seller because maybe the old roof was really old shake and now this roof is a 50-year warranted comp. Still, it is not an improvement. A new roof just makes the home more sellable. Further, I find the amount of money people put into a home tends to grow in hindsight.
Then we have the Sacramento listing agents who have done their homework and they suggest a sales price the seller does not agree with. However, maybe the seller didn’t share with her agent that she was not in agreement. She might have signed the listing agreement at a lower price than she wanted. Maybe the seller figured multiple offers would push up the price. And then no multiple offers happened.
Whatever the reason, when sellers reject a list price offer, the seller has several options. The first is the seller can take the home off the market. Especially when it is clear there won’t be any higher priced offers. The second is MLS regulations require that the Sacramento listing agent put a note into MLS for other agents that lets agents know the seller has rejected a list price offer. This option is rather defeatist for the seller because now other agents are likely to suggest their buyers pass on viewing the home.
When sellers reject a list price offer, they tend to appear unstable to everyone. The third option is to raise the price in MLS. However, if you’re a seller who thinks that’s a good idea, well, that option is pretty much like putting a gun to your head and just not pulling the trigger yet. Hate to say.