The right price for your home is a constantly moving target and it’s not always easy to determine. Buyers in this market are spending an inordinate amount of time searching for a home that meets their needs. Most times they’re doing whatever it takes just to get their offer to be one that the seller will consider. With buyer demand high, sellers are often being rewarded with multiple offers. Many times in this market, buyers line up at the front door the day it hits the market; but other times it takes a few days for the momentum to build. This is why some sellers choose to take advantage of delayed offer presentation in hopes of increasing their odds of receiving multiple offers. That leads me to this question:
Is accepting the first offer you receive on the first day on the market always the best idea?
… It depends. The most important thing to consider is what’s best for you as the seller. Sellers are currently in the driver’s seat in the Sacramento real estate market. If the offer meets all of your needs — price, terms, quick close — you might be absolutely fine taking that first offer that’s submitted. But how do you know what could come tomorrow or the next day? It’s not uncommon for offers to be presented after a home has been exposed to the market for several days, perhaps even a week. Having multiple offers as a seller allows you to negotiate the best terms for your circumstances. There is a risk, however, of your best offer not wanting to play the waiting game.
Two real estate terms you should become familiar with are delayed offer presentation and pre-emptive offers.
When a home on the market utilizes delayed offer presentation, there are written instructions from the seller instructing their Realtor to hold all offers until a specific date and time, indicating that they won’t present or accept any offers prior to that time.
Pre-emptive offers, sometimes referred to as “bully offers”, are those that insist on being presented and responded to regardless of the seller’s instructions. If you, as a seller, decide that you want to take the pre-emptive offer, your Realtor is ethically obligated to contact all Realtors who have inquired about your home to inform them that the plan has changed, giving them time to submit their buyer’s offer.
Let’s look at the pros and cons of delayed offer presentation:
- Maximum exposure to the market → Allows your Realtor to market the home for a specified period of time to ensure that all potential buyers and Realtors have had an opportunity to see it.
- Buyer bidding war → Multiple offers are common in a seller’s market and your chances of receiving multiple offers can be increased when you allow a few extra days for the offers to come in.
- Best price and terms available → In an escalating market, it can be challenging to know what the ‘right price’ is. If your home has unique features or perhaps there’s low inventory in your neighborhood, leaving the home on the market for a few extra days can ensure that you are getting the best possible outcome.
- Buyers get discouraged or insulted → You could insult what would have been your best offer by waiting for others to come in, that may never come. There is admittedly a risk of turning away certain buyers when you wait.
- A few extra days on the market → If you absolutely need to accept an offer and open escrow tomorrow… but in reality, when you allow the most exposure to buyers you give yourself a better chance of receiving a stronger offer that may have shorter escrow time periods.
If I were a seller in this fast-paced market, I would want to do whatever I could to be sure that I got the most for my home. Odds are, I’ll be a buyer in this same market and have to play the game on the other side. Without delayed offer presentation, many homes would be sold within hours of hitting the market.
One caution when dealing with a bidding war on your home, however, is the dreaded ‘buyer’s remorse’. In the heat of the moment, a buyer may say that they’re willing to pay top dollar and do whatever it takes to be chosen. After the excitement wears off and inspections are performed they may decide that they’ve overpaid. At this point the buyer can either back out or come with a laundry list of repairs and demands for the seller. There’s also the lender and appraiser who have the final say in what they think the home is worth.
The purpose of delayed offer presentation shouldn’t always be to get over asking price. It’s important to price the home “right” to ensure that you get at least the minimum price you’re expecting. You may get lucky and go over, but more importantly sometimes are the terms that you’re able to negotiate. I never would recommend pricing the home intentionally low in the hopes of getting multiple offers. That tends to draw unqualified buyers and creates a different set of problems down the road. There’s no guarantee what could happen as a result of underpricing your home.
Bottom line… it’s up to you as the seller to decide how you want to approach the presentation of offers. There are rules that have to be followed, but you’ve got options when it comes to the strategy of finding your lucky buyer. Delayed offer presentation is just one of the many ways to create a buzz about the sale of your home. We won’t be in a seller’s market forever, but for now you’ve definitely got the upper hand if you’re putting your home on the market any time soon.
“Amid the Noise” is a Monthly Real Estate Blog by Carol Kellogg & Kellogg Family Real Estate Team of Lyon Real Estate
Carol Kellogg is a Realtor living in Fair Oaks, California. She started her career with Lyon Real Estate in 1992. Over the past 25 years she has sold hundreds of homes, focusing on the importance of the customer experience. Representing both buyers and sellers, her goal is to provide quality service with a personal touch. Whether it’s a first-time buyer or seller, or a seasoned veteran in the world of real estate, Carol brings an element of experience and confidence that her clients appreciate.
#1 Realtor in the Lyon Real Estate Fair Oaks Offices 1998 – 2002.
Masters Club Outstanding Life Member
The Realty Alliance National Sales Award
C. Mike Messina Award for Leadership & Professionalism
Former Senior Vice President of Lyon Real Estate