Are You Making Offer Decisions Based on What Other Buyers Are Doing?
Scott P. Rogers
A popular new listing hits the market in Harrisonburg. It's priced well, shows beautifully, and the first weekend brings 10 or 15 showings. Lots of interest.
And then, almost immediately, buyer agents all start asking the same thing of seller agents: "Are there any offers yet?"
It's an understandable question. But what happens next is predictable and peculiar. :-)
When the answer is yes... there are two offers... buyers feel more urgency and often will decide they too want to make an offer.
When the answer is no... there aren't any offers yet... buyers often slow down a bit and quite ready to make an offer.
Essentially, this is confirmation bias playing out in real time in the real estate market.
The presence of other offers becomes evidence that the home is worth buying. The absence of offers becomes evidence that maybe it isn't. Neither conclusion is necessarily true -- but that's often how it feels in the moment.
Is this the most rational way to decide whether to make an offer? Probably not.
Whether you should make an offer on a home should really come down to how well the home works for you. Does it fit your needs, your budget, and what you've been looking for? What other buyers are doing -- or not doing -- doesn't actually change any of that.
Knowing that competing offers exist (or that they do not exist) does have some practical value relative to how we will structure your offer.. but using it as the primary signal for whether to make an offer at all... isn't usually a great idea.
If you walk through a home and you love it, the fact that no one else has made an offer yet doesn't mean you shouldn't.
And if you walk through a home and it doesn't feel right, the fact that three other people are writing offers doesn't mean you should too.
And then, almost immediately, buyer agents all start asking the same thing of seller agents: "Are there any offers yet?"
It's an understandable question. But what happens next is predictable and peculiar. :-)
When the answer is yes... there are two offers... buyers feel more urgency and often will decide they too want to make an offer.
When the answer is no... there aren't any offers yet... buyers often slow down a bit and quite ready to make an offer.
Essentially, this is confirmation bias playing out in real time in the real estate market.
The presence of other offers becomes evidence that the home is worth buying. The absence of offers becomes evidence that maybe it isn't. Neither conclusion is necessarily true -- but that's often how it feels in the moment.
Is this the most rational way to decide whether to make an offer? Probably not.
Whether you should make an offer on a home should really come down to how well the home works for you. Does it fit your needs, your budget, and what you've been looking for? What other buyers are doing -- or not doing -- doesn't actually change any of that.
Knowing that competing offers exist (or that they do not exist) does have some practical value relative to how we will structure your offer.. but using it as the primary signal for whether to make an offer at all... isn't usually a great idea.
If you walk through a home and you love it, the fact that no one else has made an offer yet doesn't mean you shouldn't.
And if you walk through a home and it doesn't feel right, the fact that three other people are writing offers doesn't mean you should too.
