It seems like kind of a dumb question, but actually, it’s fairly common. Is the home seller required to accept a full price offer? Are there reasons why you wouldn’t? The market can actually play a part in this. For instance, if a homeowner lists their property and it sits on the market for a while but then the housing market improves and the value of the house increases. Is it ethical to increase the price or counter offer for a higher price should they get a full asking price offer on the original amount?
The main reason a seller may not accept a full price offer is if the seller has received additional offers at higher prices. If the only offer a seller receives is at full asking price, even if they feel the home has increased in value while on the market, it may be unethical to ask for more. If the seller receives multiple offers for more than the listing price, then there’s a greater cause to negotiate for a higher price. However, if the home has sat for too long without any offers and then gets a full price offer, it may not be underpriced at all.
In a seller’s market, it’s very common to receive multiple offers, especially on a desirable home. Things change in a multiple offer scenario and it’s important to work with an agent that understands how to negotiate in these situations. Buyers don’t want to be part of a bait-and-switch scenario.
But you might be thinking, isn’t it the agent’s job to get the highest price possible?
Of course, the agent wants the homeowner to get as much as possible for the house, but not at the expense of losing a potential willing and able buyer. Is the goal to sell, or sit on the market and negotiate for the highest price possible regardless of how long it takes?
It also comes down to the listing agreement contract. The contract may contain verbiage that says the seller cannot reject a full price offer. Local MLS (multiple listing service) may have its own rules for accepting full price offers as well. For example, if a seller receives the full price offer and then rejects the offer, the agent must either raise the sales price in the listing agreement or make a confidential remark that the seller rejected a full price offer. This is tricky ground we are treading, so it’s important to be extremely clear with your agent on the logistics of full price offers versus multiple offers.
Of course, these rules may not apply when selling in a competitive market and receiving multiple offers. To simply raise the price on only one buyer who is willing and able to buy the property is usually not a win-win for all. Most sellers are elated to receive a full price offer, especially after a long time on the market.
It’s important to note that there are other factors when it comes to a full price offer. Terms may not be as favorable even though the price is attractive. If negotiations cannot be made to adjust the terms in favor of the seller, or as a win-win for all, a full price offer may be rejected on those accounts.
Bottom line: it’s crucial to have an experienced and well-seasoned agent on your side to price and negotiate any and all offers. Knowing you have an agent on your side that understands all types of contracts and offers really puts you in a better position overall.