Recently a couple was surprised to find out that a listing they were interested in had sold before they even had a chance to see it. This was particularly disconcerting because all the other listings they had considered were marketed for a week or more before offers were accepted. Then, in most cases, there were several other buyers vying to buy the property. But, the one that got away sold with only one offer, leaving the buyers wondering if they had missed out on an excellent opportunity.
It turns out that the listing in question wasn’t the right house for these buyers. But, the quick sale does raise a question. In a hot seller’s market, as are occurring in many areas of the country, especially in California, why would a seller accept an offer quickly without the benefit of full market exposure?
Some sellers feel under pressure to sell quickly. For instance, sellers who buy before they sell may feel more comfortable with a fast sale at a good price than they would waiting for weeks wondering if they’ll receive a better offer. That extra time could cost the sellers a lot if they are paying for two mortgages plus interim financing.
Sellers with small children, and some elderly homeowners, find the marketing experience particularly disruptive. A fast sale can be worth it to these sellers, even though it may mean leaving money on the table.
A quick sale can occur if a buyer makes a pre-emptive offer that the seller accepts. A pre-emptive offer is an offer that’s made before the seller’s designated date to hear offers, or before the property is exposed to the market. In this situation, the buyer writes an offer early and insists that it be presented to the sellers. The sellers don’t have to respond. But state law may require that any and all offers be presented to the seller.
There are drawbacks to both buyers and sellers with pre-emptive offers. If a seller is intent on waiting for market exposure before entertaining any offers, a pre-emptive offer will usually need to be very strong in order to entice the seller into changing his game plan. In other words, it needs to be an offer he can’t refuse. With a pre-emptive bid, the buyer will never know if he paid too much. Likewise, if the seller accepts an offer before receiving market exposure, he will never know if he could have sold for even more.
HOUSE HUNTING TIP: To ensure that you don’t miss out on a listing, make sure that your agent tells you about any new listing that might work for you. Some real estate agents subscribe to listing alert services that will notify you directly when a new listing that meets your specifications comes on the market. Find out as soon as possible how the seller is planning to deal with offers. The seller could be ready to hear offers as soon as the property is listed, so you might have to move quickly.
In any event, don’t wait for a public open house to see the property if your agent thinks it’s a good fit. If after previewing the property, you want to make an offer, make sure the listing agents knows this. This way you insure you will be informed if another buyer makes a pre-emptive bid. It would be in the seller’s best interest to consider both offers. But there’s no chance of this happening, if the sellers don’t know that you want to buy the property.
THE CLOSING: Real estate is a fast business that waits for no one. And sellers can accept offers whenever they want.
Dian Hymer is author of “House Hunting, The Take-Along Workbook for Home Buyers,” and “Starting Out, The Complete Home Buyer’s Guide,” Chronicle Books.
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