05/19/2021
If you're shopping for a house, you've probably come across phrases like: "All offers due by Monday, 7PM. Seller will review and decide by Wednesday 5PM." And if you're a seller, you may be wondering whether you should have an offer deadline in your own listing.
Welcome to the new normal. What's it all about? Why this language and why now?
The main purpose of an offer deadline is to allow maximum exposure (multiple days) for the house without the seller feeling pressured to consider or accept an offer that arrives soon after the house is listed and carries an imminent deadline (same day response, or within 24 hours, or early the next day are typical). A buyer who requests a quick response is understandably hoping to lock down an acceptance before other buyers have the chance to make their offers and there was a time (before now) when that strategy actually worked.
Let's say the offer comes in at full price. It wouldn't make sense for the seller to counter a full price offer with an even higher price (although I've seen it happen and when it does it's disorienting). It is through multiple offers that prices escalate. Taking a few days to receive and review offers sets the stage for multiple offers.
Given the nature of our competitive seller's market, many sellers today feel that they are in a position to set parameters and be explicit about their expectations. Some of the expectations we see (expressed in private agent remarks on the MLS) include requests along these lines:
Offers will be accepted until XYZ date and time. Seller will respond the following day by XYZ time. Please write offers accordingly.
Offers must include language that reflects buyer's willingness to make up any shortfall between appraisal and purchase price, and must include proof of funds to cover that amount.
Seller wishes to retain possession of property for 20 days (for instance) after closing at no extra cost. Please include this language in your offer.
Seller plans to leave camper in driveway for 15 days after possession. Buyer must agree to this in writing.
I've been a Realtor for 8 years and have sold hundreds of homes, and my brokerage Gallery of Homes Real Estate has sold many more in total. We have NEVER seen anything like these seller expectations/demands written into the actual agent remarks in the MLS until now.
These expectations and parameters seem appropriate when the seller is confident the property will generate big interest and multiple offers. But there are no guarantees, of course, and some of the risks are:
1. Scaring away a good buyer who doesn't wish to compete with other buyers and wants to avoid the drama of multiple offers.
2. Bypassing a good offer in the hopes of getting even better ones which may not arrive.
3. Experiencing a sheepish feeling when you realize you were overly confident and now must delete your original agent remarks from the listing.
Whether you want to include an offer deadline is your choice. If you've got a great house, priced appropriately, now may be your moment to exercise that upper hand, but be mindful of the difference between claiming your strategic advantage and behaving unfairly. As any Realtor will tell you, karma is real in real estate.
This info is from Deb Kent's Crew at Irvington-based Gallery of Homes Real Estate. Text Sep with any questions. 317-201-7587
