Client Question: “It seems like everyone is holding off to review offers, should we have an offer review date for our house?”
Dear Should I have an Offer Review Date:
There are pros and cons to every strategy when it comes to listing your house or condo. For offer review dates here are potential risks and benefits.
Risks:
- In order to create the frenzy of buyers who are willing to compete for your home on an offer review date you have to price strategically, which often means pricing it below what you think it will sell for in order to give the buyers room in their budget to escalate the price up so if you don’t get offers on your review date and get just one after the fact, you have to be comfortable taking that lower list price as your sales price
- Some buyers do not want to participate in the multiple offer battle so you can lose buyers who just aren’t willing to throw their hat in the ring
- Also on that same note if your house or condo is not as cool as YOU think it is, or it has “unique” or weird features, the offer review date might not be the best idea if your home’s characteristics will limit the number of buyers who might want to compete for it
- If several homes have an offer review date on the same day as your home, you could lose some potential buyers for your home as those buyers would have to choose which home to move forward with an offer on
- Between the time a buyer sees your home and the offer review date, the buyer could find another house they like more and not end up offering on your home whereas if they saw it and could write it up immediately they might have moved forward
Benefits:
- If you price your home competitively, you can get multiple buyers competing for the house or condo and create a bidding war where buyers escalate price and offer desirable terms, like waiving their inspection or financing, and you can get a much higher price than you could have with just one offer
- If you get competing offers, most buyers will complete a pre-inspection of the property and if they move forward with an offer they don’t ask for any concessions for inspection items so you will not have to complete any repairs, reduce price or give monetary concessions for inspection items found
- Often buyers will also waive their financing contingency or agree to cover a low appraisal, should that happen, which means if the appraisal on the house comes in low, they will agree to pay the difference and move forward with the purchase regardless of its appraised value
- Buyers in multiple offers will also often waive other contingencies making the deal more secure for you overall
Multiple offers are never a guarantee, even in our inventory starved market where sellers generally have the upper hand. Because of that, consider the offer review date strategy very carefully, and really evaluate how realistic you are being with your list price vs what the market might be willing to pay. Greedy and unrealistic sellers can find themselves without offers on that offer review date, and consequently they become disappointed sellers pretty quickly.
Sellers who are realistic on their asking price, and willing to properly prepare their property so it appeals to the largest pool of buyers, will more often do better than they expected.