Buyers- “Wow, this house is great. It has the room we need, is a good price, and is close to the kids school.”
Broker-“So that being said, we should probably put an offer in today! So we dont lose this awesome home.”
Buyers-“Ahh, well….I don’t know. We’ve only seen 10 house’s. Maybe we should sleep on it, or see a couple more homes first, just to make sure?”
…..24 hrs Later
Broker–“Mr and Miss clients. I am sorry to tell you but I just got off the phone with the Listing Broker of that lovely home we saw yesteday. He said they had 3 offers come in and the owners already accepted one, Over asking price!”
Has this happened to you? As a buyer it can be frustrating to find what seems like the perfect home, just to “Think about it,” and find out its gone. Here are 5 Reasons You Should Write Your Offer Now!
1) Avoiding a bidding war / Getting a better price. Sometimes if you get an offer in quickly, you will be able to get it accepted quickly at a slightly lower price than if you waited and the situation became a bidding war. I’ve seen this often with REOs (foreclosures). I’ve won out on many desirable REOs because my client’s offer is the first offer, gets put into the computer portal that evening before the REO agent leaves the office that afternoon, and the next morning when they check their email, it is already accepted. Gone. My client is celebrating as the 10 other higher offers that poured in that evening and the next day are put aside.
2) They just did a price reduction. When a seller does a price reduction it is highlighted for those searching for a home. In our area, an automatic email alert will be sent to buyers who are actively looking for that type of home, and the home will appear in the “hot sheet” search that most buyer’s agents run first thing every morning. Even a modest price reduction can dramatically increase the attention that a listing receives. If the price is now appealing, or you think the owner will now be receptive to your offer, get your offer in quickly before someone else has the same idea.
3) Your offer may deter other buyers. Buyers dislike bidding wars, so many will shy away from a home with an offer already on it. In our current market, buyers are expecting bidding wars on REOs; however, on short sales or traditional sales, often the presence of another offer will still make buyers and their agents shy away. Accordingly, your early offer may keep others from even bidding. (Note this does not hold true for low ball offers, if you submit a low ball offer, the listing agent will simply tell other buyer’s agents that the offer they have in hand is low and it will not generally deter other buyers from bidding.)
4) Eager can be a good thing. Sometimes buyers don’t want to seem eager. They don’t want to come off like they want the home too badly. However, while playing “hard to get” may be an effective strategy for some personal relationships, I don’t think it translates as well into the home buying arena. After all, most people don’t spend hundreds of thousands of dollars for homes they are indifferent to, so if you write an offer today or write it tomorrow they are still going to assume that you want the home. Also an experienced listing agent will encourage a seller to take a solid offer from the most motivated buyer. Being the first to arrive conveys that you are motivated. Accordingly, writing the offer today on a well priced desirable home can indeed be a smart move.
5) Logistics matter. An offer doesn’t magically appear in front of the seller. For an REO (foreclosure), waiting until Friday to submit an offer means that your offer probably has to withstand weekend buyer traffic and interest, because the asset managers that consider those offers often don’t often work weekends or holidays, or the REO listing agent may simply not input offers until Monday. In a sale where a “real” seller is responding, you can (and probably should) limit the time period that the offer can be considered to speed along getting an answer from the seller. However, how soon it will be presented or responded to will still be dependent on the situation. If you write the offer today, and I find out the listing agent is meeting with the seller in 30 minutes, I can send it right over. If the offer is not already signed and in my hand, I won’t be able to take advantage of that information. These minor details matter and, I believe sway in favor of being fast and first in many cases. I’ve even beat out another offer by being the first offer faxed to an out of town seller because they didn’t want to pay to receive another fax the next day. The offers were about equivalent so they just accepted my clients. It happens.