- The Washington Times - Thursday, January 1, 2004

The well-appointed house stood in Northwest’s tony American University Park neighborhood, neither better nor worse than a score or more of similar houses in the area. There was just one problem. When it came time to sell, the house stayed on the market for weeks.

The owner kept waiting for a better offer, according to one Realtor familiar with the house.

A house on the market too long looks suspicious to potential buyers. That’s bad enough, but if the house is in a neighborhood where homes for sale routinely attract multiple contracts, the choice to hold out for a better offer can become deadly.

When do you decide to stop taking offers? Will a better offer eventually come along? The answers have as much to do with your own relocation needs, your neighborhood and even the time of year as they do with your particular house.

“Which offer to accept is something the agent works out in consultation with the seller based on a lot of factors, ” says Ricki Gerger, sales manager at Long & Foster’s Friendship Heights and Georgia Avenue offices. “It depends on where the house is and how hot the market is.”

The seller’s agent has to be pretty savvy about what is going on in the marketplace. While some neighborhoods may be hot, others appear to be leveling off. That can affect how many offers a seller gets.

“People shop the neighborhood first,” says Ben Zurun, a broker with RE/MAX Presidential Realty in Fairfax. “Some neighborhoods are a lot hotter than others.”

Certain neighborhoods in the Washington area are so hot right now that the rules for buying and selling — and accepting contracts — don’t really apply. These include popular and up-and-coming neighborhoods within the city itself, such as Georgetown and Adams Morgan, as well as sections of close-in suburbs such as Arlington and Bethesda.

“People want to live closer in, especially with all the new jobs created by [the Department of Homeland Security],” Mr. Zurun says. “And if you’re young, you want to play.”

Here, low supply and high demand translate into multiple offers and bidding wars. Some buyers will even pay a premium over the sale price to ensure that they get the deal.

“I had one house that had 32 offers,” Mrs. Gerger says.

Hot neighborhood or not, your own needs also should factor into the decision about when to accept an offer. Clearly, if you have to start a new job in California in a month, you can’t spend your time waiting for just the right offer to come along.

In fact, in today’s seller’s market, many homeowners find that they have sold their home before they are ready to move.

As a seller, you are not bound to take any particular offer. Common courtesy, though, should dictate that the offers you review should at least be acknowledged.

Once you place your home on the market, usually on a Friday, area real estate agents become aware of the property through the Multiple Listings Service.

Occasionally, some sellers receive offers even before the scheduled open house, usually held Sunday. More often, sellers begin to receive offers within the next couple of days.

“Agents will let other agents know that we are going to be looking at offers at a particular time and date,” Mrs. Gerger says. “Sometimes there are no offers. You never really know when an offer will come.”

It is in the seller’s best interest to give buyers an answer “pretty quickly,” Mrs. Gerger says.

“We try to work for that to be within 24 hours,” she says. “We ask the seller to put himself in the buyer’s shoes. It’s a very stress-making situation.”

Houses in popular areas may stay on the market only for a matter of hours — even minutes. But in “normal” neighborhoods, where homes typically take about two weeks to sell, it is important for the seller not to let the specter of an infusion of cash get in the way of closing the deal.

On those occasions when a home has been on the market awhile, it is in the buyer’s best interest to find out exactly how long before making an offer.

In Maryland, for example, the real estate agent is obliged to point out the length of time a house has been for sale. A longer time on the market may mean the buyer can offer less than the asking price.

It can be difficult to be a buyer these days, what with the seller wanting to take in as many offers as possible to create competition and increase the price.

However, it can be even harder to be a seller, who, given the state of the current market, particularly in areas of Washington and its close-in suburbs, can’t help but think that a buyer with a better offer is lurking just around the corner.

What’s in an offer? A prospective buyer’s offer will include a number of terms and conditions that govern the sale of your house.

Although some sellers accept a likely-looking offer “as is,” more frequently, they respond with a counteroffer, altering one or more of the terms and conditions of the original. The buyer can then choose to accept the counteroffer or to “counter the counter” with a new offer of his own.

If you don’t accept the buyer’s offer as is, the buyer has the option of pulling his offer and walking away.

If you decide to accept and sign it, you lock yourself into closing the deal with that particular buyer.

“When a contract is fully ratified, that means the buyer and seller have come to complete terms,” Mrs. Gerger says. “The seller can entertain other offers up to the time they ratify the contract.”

Contracts are often dependent on certain provisions, called contingencies.

Typical contingencies include a clause that nullifies the deal if the buyer is unable to obtain financing or if the home doesn’t pass inspection. Under certain contingencies, the buyer or seller can cancel the contract.

Contracts also may cancel if there is a drastic change in circumstances; for example, if the buyer loses his job and loses his financing as a result.

Until that contract is signed by both parties, you can continue to entertain offers. Legally, at least, verbal promises don’t apply. An agreement to sell between buyer and seller is governed by the general principles of contract law.

“Verbal doesn’t count,” Mrs. Gerger says. “We only go by what’s in writing.”

In some situations, sellers may accept a secondary offer, a sort of backup contract that will go into effect should the first contract fall through because of failure to meet one of the contingencies.

Time of year also can factor into a seller’s decision about how long to wait before going with an existing offer. The housing market is slower at certain times — the holidays, for example, and in August, when many people are vacationing.

“Some neighborhoods are more tied to the school calendar,” Mr. Zurun says. “If you are looking at a house three blocks from the junior high school, well, that’s a big draw for people with children.”

Still, buyers in slow times can be even more committed to closing a deal quickly.

“Buyers in extreme conditions are serious buyers,” Mr. Zurun says. “There are not as many, but they’re more serious.”

How long should you wait? Not too long, Realtors say. In fact, your very first offer is likely to be your best.

“We know in our business historically that the vast majority of the time, the first offer will be the one to go with,” Mrs. Gerger says. “The longer a property is on the market, the less desirable it is.”

Wait too long to reply, and your buyer may have gone somewhere else. Nothing is legally binding in the period between the buyer’s submission of an offer and the seller’s acceptance. The buyer can withdraw from the transaction at any time.

“People should be concerned about their goals,” Mr. Zurun says. “You want to consider the area you are in and how it will impact your way of life if you accept or reject an offer.”

Bottom line: Consider your circumstances. Don’t wait too long, and don’t bank on a sudden windfall around the corner.

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