The Offer Isn’t Just the Price: What Does Waiting Really Cost a Home Seller?

Before turning down today’s offer for a “better one,” South Denver Metro sellers should know the number the next offer actually has to beat.

By Bruce McQuiston
Coldwell Banker Realty
Your Personal Real Estate Coach

Here’s a conversation Bruce has seen many times.

The house is listed at $500,000.

An offer arrives at $485,000.

The seller looks at the number and says:

“No. We’re not giving the house away. Let’s wait for a better offer.”

Maybe that’s exactly the right decision.

But Bruce would ask one question before saying no:

How much better does the next offer actually have to be?

Because $490,000 two months from now isn’t necessarily better than $485,000 today.

And that’s where sellers sometimes get tripped up.

The List Price Isn’t Money in Your Pocket

This is the first mental hurdle.

If a home is listed for $500,000 and someone offers $485,000, it’s natural to think:

“We’re losing $15,000.”

Not necessarily.

The $500,000 is an asking price.

The $485,000 is an actual offer.

One is a target.

The other is a buyer willing to put money and contractual terms behind the number.

That doesn’t mean you should accept it.

It means the decision should be based on more than emotion.

Let’s Do Some Simple Math

Consider a hypothetical seller.

The home is listed at:

$500,000

A buyer offers:

$485,000

The buyer also asks for:

$3,000 toward closing costs

And can close in:

30 days

The seller has already moved into the next home.

Their reaction?

“Let’s wait. Surely we’ll get something better.”

Fair enough.

But suppose the next offer doesn’t arrive for another 30 days.

Then that buyer needs another 60 days to close.

The seller has now pushed the closing approximately 60 days beyond when today’s buyer would have closed.

Those 60 days aren’t free.

Your House Has a Meter Running

Even when nobody is living there, the house continues costing money.

Interest.

Property taxes.

Insurance.

Utilities.

HOA dues, if applicable.

Lawn care.

Snow removal.

Cleaning.

Maintenance.

And potentially repairs or other unexpected expenses.

Suppose those actual carrying costs total $2,000 per month.

Another 60 days means roughly:

$4,000.

Suddenly that future $490,000 offer isn’t $5,000 better.

Much of the difference has already disappeared.

And we haven’t compared the other terms yet.

This Is the Number Bruce Wants Sellers to Know

Bruce calls it the:

Cost of Waiting Number

Before rejecting a legitimate offer, calculate:

What does it cost to own this home for another 30 days?

Then:

60 days?

Then:

90 days?

Now determine:

What would the next offer have to be to actually leave you better off?

That’s a much more useful question than:

“Do you think somebody will pay more?”

Of course somebody might.

The question is whether the likely increase is enough to compensate you for the additional time, expense and risk.

But Don’t Count the Entire Mortgage Payment as a Loss

This distinction matters.

Suppose the seller’s monthly mortgage payment is $2,500.

It would be tempting to say:

“Waiting another two months costs you $5,000 in mortgage payments.”

That’s not necessarily accurate.

Part of the payment may reduce principal.

That isn’t the same thing as mortgage interest.

The principal reduces the loan balance that eventually has to be paid off when the property sells.

Likewise, money going into an escrow account may ultimately pay property taxes and insurance.

So Bruce doesn’t want to inflate the cost of waiting just to convince a seller to accept an offer.

Use the real numbers.

Mortgage interest.

Taxes.

Insurance.

Utilities.

HOA.

Maintenance.

Landscaping.

And other genuine incremental expenses.

Then separately look at the cash the seller must continue spending every month to carry the property.

Those are related numbers.

But they’re not identical.

There’s Another Cost Nobody Puts on the Spreadsheet

Risk.

Today’s buyer is real.

Today’s contract can be evaluated.

Today’s financing can be reviewed.

Today’s closing date is known.

The future buyer doesn’t exist yet.

Maybe the next offer is $500,000.

Maybe it’s $475,000.

Maybe it takes three weeks.

Maybe three months.

Maybe mortgage rates move.

Maybe another competing listing comes on the market.

Maybe the market improves.

Maybe it doesn’t.

That’s why Bruce believes sellers shouldn’t confuse:

“I want more money”

with:

“The market is likely to give me more money.”

Those aren’t the same thing.

This Is Where Market Evidence Matters

There are really two questions.

Question #1:

What does the next offer have to be to financially beat the offer we have today?

That’s math.

Question #2:

What evidence suggests we’re likely to receive that offer within the necessary timeframe?

That’s market analysis.

Bruce wants both answers before making the decision.

Look at:

Recent comparable sales.

Current competing listings.

Price reductions.

Pending properties.

Days on market.

Showing activity.

Buyer feedback.

Inventory.

Seasonality.

Mortgage conditions.

And what buyers are actually doing in that particular price range and neighborhood.

If the evidence says the property is underpriced and buyer activity is strong?

Waiting may make perfect sense.

If the property has been listed 47 days, showings are slowing and three competing homes just reduced their prices?

That’s a different conversation.

A Higher Offer Can Actually Be a Worse Offer

Imagine two offers.

OFFER A

$485,000

Closes in 30 days.

Reasonable contingencies.

Solid financing.

OFFER B

Arrives 30 days later.

$490,000

Needs 60 days to close.

At first glance:

Offer B wins.

It’s $5,000 higher.

But suppose waiting until that second closing creates $4,000 in additional carrying costs.

Now the difference is roughly $1,000 before considering any differences in credits, transaction expenses, contingencies or risk.

Was waiting worthwhile?

Maybe.

But it’s certainly not the $5,000 victory it appeared to be.

That’s the conversation sellers deserve to have.

And Sometimes the Lower Offer Is the Better Offer

Price is only one term.

Bruce also looks at:

Financing strength.

Down payment.

Earnest money.

Inspection provisions.

Appraisal risk.

Seller concessions.

Closing date.

Possession.

Sale-of-home contingencies.

And the probability the buyer actually reaches the closing table.

A $700,000 offer that closes isn’t automatically worse than a $710,000 offer loaded with uncertainty.

The highest offer and the best offer aren’t always the same offer.

Know Why You’re Selling

This brings Bruce back to the advice he gives virtually every seller:

Know why you want to sell.

If maximizing every possible dollar is the overriding goal and the seller has plenty of time and financial flexibility, waiting may be completely reasonable.

But what if the seller has already purchased another home?

Is relocating?

Is settling an estate?

Needs to close before purchasing the next property?

Doesn’t want to carry two homes through winter?

Or simply wants certainty?

Then time has value too.

The right decision depends on the seller’s objective.

Bruce’s Perspective

Bruce isn’t suggesting sellers accept the first offer that arrives.

Quite the opposite.

A seller should negotiate aggressively when the market supports it.

But there’s a difference between:

Strategically rejecting an offer

and

Rejecting an offer because it doesn’t feel high enough.

Bruce wants sellers making decisions with information.

Not hope.

So before rejecting the buyer sitting at the table, calculate three things:

1. What will this offer actually net?

2. What does waiting another 30, 60 or 90 days actually cost?

3. What must the next offer deliver to leave the seller better off?

Then look at the market and determine whether that outcome is reasonably supported by the evidence.

Now you have a strategy.

The Bottom Line

When an offer arrives, don’t just circle the purchase price.

Ask:

“What do I actually walk away with…and when?”

Because sometimes:

$485,000 today beats $490,000 later.

Sometimes it doesn’t.

The point isn’t knowing the answer before the offer arrives.

It’s knowing how to calculate it when it does.

Thinking About Selling in South Denver Metro?

Before Bruce talks about list price, there’s another number worth knowing:

Your Cost of Waiting Number.

Bruce can help homeowners in Littleton, Highlands Ranch, Englewood and the South Denver Metro area compare what selling now versus waiting may actually mean financially.

Thinking about selling?

Message Bruce:

“WHAT’S MY NUMBER?”

Bruce will help you work through the numbers before the market makes the decision for you.

Bruce McQuiston
Coldwell Banker Realty
Your Personal Real Estate Coach

Don’t just negotiate the price. Negotiate the outcome.