I probably shouldn't admit this, but you know the guest who arrives ON TIME while the hostess is still putting on her make-up, hoping no one will show for another 15 minutes or so? Well that's me. (Do you want to just cross me off your party list now?)
I'm the early bird who shows up on your doorstep, gift in hand, at exactly 6:30pm. (My mother valued promptness.) As it turns out, that socially ingrained habit, while not so welcome at parties, works great in the world of Real Estate where recently, the victory seems to go to the swiftest.
"Do you have an opinion about preemptives offers?" one client recently asked? Why yes, I do. In what has shaped up as perhaps, the most aggressive marketplace we have seen in years, Sellers - and their agents - have figured out that they needn't necessarily wait to put in an offer. In fact, I've successfully utilized this strategy on several homes this spring to beat the competition to the punch. Huh? Let me back up a moment to give you some context, especially if you're from out of town where your home may sit on the market for weeks, if not months, before receiving an offer for less than than the list price, OR for those of you who have been on the sidelines for the last decade or two . . . Because demand far exceeds supply, here's how the scenario usually unfolds for Sellers in the Bay Area wherein a listing has two Sunday Opens and two Broker's Opens before hearing ALL offers on a set date. At which point, several offers will usually present to both the agent and the Sellers of the home. It's an opportunity to sing the praises of one's Buyers in person, and to lay the groundwork for the deal and how they (the agent and the Sellers) may expect the transaction to progress. It's typical these days to hear at least 3-4 agent presentations, not unusual to hear 5-10, and not unheard of to hear 10-20. (Wow!) "My Buyers are a wonderful family with two darling children who absolutely love your home . . . They are preapproved through their lender, have waived the appraisal contingency . . . and can close in 17 days!"
(Warning Mr. Spock, you should only ever waive the appraisal contingency IF you have cash reserves on hand to make up any delta a less than stellar appraisal may create.) And so it goes until all the offers have been heard and the Sellers come to a decision. BTW- the Sellers may reject ALL the offers presented; accept the highest (Winner, winner, chicken dinner!), take one that's lower with better terms (ALL CASH), choose their favorite just because, counter one to match the best at the table, OR counter several. That's right, the Sellers may, in fact, "cherry pick" from the available offers and decide to counter the price on one, the contingencies on another, and a rent-back on the third. If all three 'willing and able' Buyers accept the counter, the Seller has the right to choose which party they prefer the most in what can feel - to the Buyers - like an unfair popularity contest. While home sales are first and foremost, a business transaction, as we all know, they tend to be highly emotional as well. "Julie, make sure to find us a lovely family who will appreciate our home," is a sentiment I've heard on more than one occasion. To bypass this difficult waiting period and the threat of multiple competition, many Buyers are willing to quickly step up upon finding a home they desire and write an offer the Sellers would be foolish to reject, in what's often referred to as the "preemptive offer." I should point out that technically, it is only a "preemptive offer" IF an offer date has been set and published in the MLS (the Multiple Listing Service); otherwise, a quick offer is just an aggressive play by the Agent and their Buyer, and why not? (I'll speak to this in a moment.) The key words here are : "write an offer the Sellers would be FOOLISH TO REJECT!" With multiple offers from which to choose on most well-priced homes, a Seller will only consider this play IF the number presented is high AND the terms are exceedingly strong (well financed, quick close, no contingencies)! "Would the Sellers accept a full price offer today?" I've naively been asked at a Sunday Open. Sorry, no, you'll have to do much better than that. In other words, an early offers has to SERIOUSLY put to rest the idea that a better offer lay in the waiting. Not everyone likes this quicker, faster, highly heated marketplace and that's their prerogative; no one is forcing a Buyer to take an offer earlier than they had anticipated. However, one shouldn't always expect that the Buyer will return two weeks down the road either. A few years back I represented a fantastic family who asked me to present an early offer that was politely declined without so much as a counter. (Fair enough.) By the time the offer date rolled around, my Buyers had moved onto another house and were firmly in contract. (Footnote, the first home didn't receive the anticipated offers and sold for substantially less than our "preemptive" price, proving to be a very costly roll of the dice for those Sellers.) So is the "bird in the hand worth two in the bush?" That's a decision only the Seller can make and one their agent should allow them to make. (It's not our risk; it's yours.) The "Why not?" is that the quick sell can leave money on the table. Certainly, you'll never know if someone else would have paid more had you waited and therein lies the most difficult part of the play; the uncertainty of the "What if?"
Whatever direction you decide to employ, DO understand that the quick or "preemptive" offer may show up on your doorstep as you bring your home to market. So define a strategy with your agent -upfront - with respect to your timelines and whether or not you are willing to entertain an early bid (as my husband and I recently did when selling our own home here in town). In many cases, time won't improve the offer you'll receive today.
Personally, I'm a BIG fan of the early bird and that's the "What's up?"
Julie Gardner, has been writing The Perspective for 18 years and has published more than 670 essays on life and real estate.