A year ago, I closed escrow on the sale of a 2 bedroom, 1 bath condo on behalf of a client. The market was softening, so the property was on the market for longer than expected. The price had to be reduced in order to generate an acceptable offer. That offer, in reality, was still below the asking price because it included a credit from the seller to the buyer for closing costs.

At the same time that this condo was on the market, a competing property with the same floor plan, same size but inferior location in the complex was also on the market at the same original price as originally posted for my client’s condo. I spoke to the owner of that condo and she told me that they had rejected an offer, that she had felt tempted to take, based on their agent’s advice and her husband’s opinion that the agent was right.

That condo did not sell…ever!!! It stayed on the market through subsequent price reductions. It was later withdrawn from the market.

Last fall, the property came back on the market with an even lower price. However, by then the value of the property verses the amount of the loan had changed to the point where the sale would have to be a “short sale”. Still no sale!

Now the property is being offered for sale by a new broker, at a new price and with a new owner. Guess who that owner is??? Good guess! The lender now owns the property. It is an REO…foreclosure…bank-owned property.

The current list price is a full 33% below the price at which the property had been listed when the owner told me that they had rejected an offer as not being sufficient!

Did they make a mistake? Ya, think? Yes, hindsight is perfect, but it is an old saying that “the first offer is often the best offer”. Of course, that is not always true, but it is more often true in a market that if declining.

So…what is the lesson to be learned? If your house is for sale, think very seriously about any offer that you receive before deciding that it is not good enough. You may think that you will be taking a beating if you accept that offer, but the next offer may mean a worse beating. Worse yet, there may be no next offer!