Why aren't buyers writing an offer on our home?
During the height of the season, I find myself having to address this question anywhere from three to four times a week. Many sellers, especially those who have had their homes listed for an extended period of time, are confounded by the resistance of buyers to write offers. “Just have them present an offer… something that we can look at.” So, why are buyers sometimes reluctant to write an offer on a property that they might love?
Let’s start with some basic customs that play out in the local real estate market. You see, every municipality has its own real estate customs and traditions. Here in Rochester, buyers are conditioned to think that when purchasing a home, it is customary to write offers that are 5% below list price. When consummating that deal, buyers expect that the final amount will end up approximately 2% below list price. Stated another way, when a seller attributes a list price to their property, they are not only advertising list price, but in essence, they are also disclosing what it is that they want to sell the property for.
So, when a buyer walks through a property, they are going to formulate an opinion as to what it is that they think the home is worth. If this value roughly corresponds to the list price, minus 2%, then they will consider writing an offer. However, if the delta is greater than 2.5%, more likely than not, they will walk away. Why? There are two primary reasons…
1. First, the whole process of buying and selling property is emotionally draining. Buyers do not want to engage in a process that will take several days to play out, all while taxing their emotional well being. In their minds, the common thinking is “Why bother writing an offer on an overpriced listing? The sellers are not interested in selling for the price that I think it is worth. Therefore, I will either wait for the list price to drop, or continue searching for another home.”
2. Second, buyers are reluctant to write an offer on an overpriced listing simply because of the nature of social engagement here in Rochester. As we know, Rochester is an incredibly small and polite community. Most Rochesterians are conditioned to behave in a way that could never be construed as unkind or offensive towards others. Nobody wants to potentially offend the seller who they may very well see during their morning coffee run.
Think this sounds crazy? More than 80-90% of the sellers that I work with tell me that if they were in the shoes of the buyers, they would write an offer because they perceive themselves to be more aggressive, savvy consumers. However, the reality is, when working with buyers, very few actually do write what they would consider to be lowball offers – for the very reasons described above. Now, I realize that this sounds a bit odd to many sellers. Most especially for those who have come to our community from outside of the area. However, I see this phenomenon play out every single day. After just a couple of days in my shoes, one would notice almost immediately how prevalent and deep-seeded this Rochester phenomenon is!