Sometimes buyer would be surprised to find out that a listing they were interested in had sold before they even had a chance to see it, leaving the buyers wondering if they had missed out on an excellent opportunity. It turns out that the listing in question wasn’t the right house for these buyers. But, the quick sale does raise a question. In a hot seller’s market, why would a seller accept an offer quickly without the benefit of full market exposure?
Some sellers feel under pressure to sell quickly. For instance, sellers who buy before they sell may feel more comfortable with a fast sale at a good price than they would waiting for weeks wondering if they’ll receive a better offer. That extra time could cost the sellers a lot if they are paying for two mortgages plus interim financing.
Sellers with small children, and some elderly homeowners, find the marketing experience particularly disruptive. A fast sale can be worth it to these sellers, even though it may mean leaving money on the table.
A quick sale can occur if a buyer makes a pre-emptive offer that the seller accepts. A pre-emptive offer is an offer that’s made before the seller’s designated date to hear offers, or before the property is exposed to the market. In this situation, the buyer writes an offer early and insists that it be presented to the sellers. The sellers don’t have to respond. But state law may require that any and all offers be presented to the seller.
There are drawbacks to both buyers and sellers with pre-emptive offers. If a seller is intent on waiting for market exposure before entertaining any offers, a pre-emptive offer will usually need to be very strong in order to entice the seller into changing his game plan. In other words, it needs to be an offer he can’t refuse. With a pre-emptive bid, the buyer will never know if he paid too much. Likewise, if the seller accepts an offer before receiving market exposure, he will never know if he could have sold for even more.
Now, why buyer put in a pre-emptive offer? Putting an offer in a head of time, gives buyer leverage as the first bidder. If they say no, we at least kind of feel out where the sellers want to be, and then we get another chance to try. I help my buyer X put in a pre-emptive offer, seller didn’t take it the first time, but when it came to the offer date, we already built a good relationship with the listing agent and seller. After consideration, seller gave us a counter and sold us the house.
Buyers: If you have time to see the house during broker tour, I encourage you to do so. We can go back revisit the house during open house time and maybe with an offer in hand.
Remember, Real estate is a fast business that waits for no one. And sellers can accept offers whenever they want. Time is essence.