Does the seller have to accept a full price offer? Episode #182
Hello and welcome to Todd Miller TV. I keep hearing this thing over and over and/so I’m gonna address it. Because it’s a misconception out there. So what I heard was somebody said “Well Todd, I heard that on a Listing, if a buyer makes an offer that’s full price, with no like conditions, that the seller has to accept it.” And actually, that information, if it was true, causes people to make bad decision when they list their house. And I’ll explain what that is. Okay. So, the question is, if somebody is/if you see a property, it said it’s listed for a $100,000 in the MLS, and somebody offers a 100 grand; Does that seller have to accept? The answer is no! They don’t! There’s an easy reason for that. In Real Estate, all agreements have to be in writing. That means, the buyer and the seller have to agree to all the terms and everything. And a Real Estate transaction is very complex. There’s a lot of things, not just the price and it’s cash. There’s what title companies you can use, how much your diligence, and all those other stuff and none of that has been agreed to the forehand. So, the truth is, the answer to that question is no! You don’t have to/the seller doesn’t have to accept any offer. A list price in Real Estate is nothing more than an invitation to make an offer. That’s all it is. It’s like a “Send me what you got and we’ll negotiate form there”. It’s more like a/it’s not even a starting point for negotiation. It’s just an invitation to send offers in. So what happens now, we’re gonna look at a couple of scenarios. Scenario number one is, you have this belief that if you out that price out there and you get it, you have to accept the offer. So, what do people do when they list their home? Well let’s just say the home is actually worth $225,000. Well the seller’s wanna list it for $250,000. Because
well they don’t wanna take $225,000 because what if someone’s willing to pay $230,000? If they get off of $225,000 they have accept it, right? ‘Cause that’s what they believe. So the offer high and they wait. And then they say “Well we’ll drop it 5 grand and 10 grand” and wait. And they go through this process ’til they get down to where they/it’s on the market. And the problem with that is now they’ve got all this marketing time and houses have been out there and buyer’s have missed it because it’s been overpriced. People have forgotten about it. So now you have to discount the house to sell it. And some of that comes from that mis-perception. Actually how that client’s want/I said “Look let’s intentionally price that low to get offers, just to get the ball rolling and get the offers and if you don’t like any of the offer we can reject them all.” And they said “Well no, I by law have to accept an offer for less prices and you don’t have to do anything.” The listing agreement, nowhere in the listing agreement or in the MLS does it say, the seller has to do anything. As a matter of fact, if the seller/if a full price offer comes in, and the seller can say, “I don’t want that offer. I don’t even wanna sell my house.” The Real Estate agent can’t even ask for a commission saying “Look I procured a buyer. Until it closes we have procured anybody”. And until the/until agreement is signed with the buyer and the seller both agreeing to the terms, it’s not a deal. So it’s just because you listed your house at a price, doesn’t mean you have to accept. Huge misconception out there. The difference is, the difference between what a listing is and a list price is, and a general public offer, you know like when you got to the store and there’s a sticker that says, this item is for $2.50. They’re saying anyone who will pay $2.50 can have that item. It doesn’t work that way in Real Estate, It’s not the same thing. Read the agreements, read the contracts, you know, go talk to an attorney, but don’t worry that if you list your house low as a marketing strategy that you’re gonna be forced to sell if somebody offers that. It’s not the case. Okay? So anyway, makes it easy if you just offer/if you just come out with market value as your “hey, this is what I want to sell for it, then you have to deal with any of those things.” So anyway, that is my update for today. Hope I cleared up any misconceptions about that, and hope to see you on another video. Thanks!