Sound Off: What are the benefits of preemptive offers?
A: In the San Francisco market in which there are more buyers than there are homes for sale, we have fallen into a pattern of setting offer deadlines — specific times when the listing agent announces that they will collect all offers at once and review them together with the seller.
A preemptive offer attempts to break that pattern by submitting an offer several days before the deadline.
There are many advantages for a buyer to submit a preemptive offer. The buyer has a chance to swoop in and get their offer accepted ahead of any other buyer. It’s a good way to get the seller’s attention, to test their resolve and to glean some new information about the seller and what they are thinking.
The worst thing that can happen is the buyer’s offer is turned away and the buyer may be asked to re-submit an offer at the appointed deadline.
Sellers can be pleasantly surprised by a strong preemptive offer that far exceeds their expectations in price and terms. If it’s cash and if the price is beyond your wildest dreams, why not take it? One reason not to take it is that if that buyer is so motivated, they should be able to wait a few more days for the offer deadline when an even better and more qualified buyer may appear.
John Solaegui, Paragon Real Estate Group,
(415) 999-0673, jsolaegui@paragon-re.com. A: When a hot new listing hits, it gets tons of attention and will likely get multiple offers.
So the listing agent might set a date to review offers. This allows time for buyers to do inspections and submit a compelling offer on that date.
If you’re the seller, the more offers the better, right? You set a date and fully expose it to the market and let the market speak. Everyone saw it and they’re competing “on the date” so you must be getting the best price.
But this can backfire. You risk scaring off buyers who are averse to bidding wars. New competition might syphon off some of your luster.
If a seller is presented with a pre-emptive offer, why not take a look?
It’s usually an experienced agent with clients who’ve lost out elsewhere and they need to win this time.
Buyers need to offer their highest and best, and then trust that just as many people will want their home, when the time comes to sell, as they do now.
Adam Gavzer, McGuire Real Estate,
(415) 505-0714, agavzer@mcguire.com. A: Preemptive offers are buyers’ written offers that sellers are willing to consider prior to a previously set offer date. In other words, an offer date may be set for Oct. 5 but a buyer offers to purchase the property at a certain price before that date and if successful, no other offers can be accepted.
It can be a controversial move, as one can imagine, that might anger both potential buyers and their agents who were acting in good faith that a date is set and everyone’s offers will be considered at the same time.
On the other hand, aggressive buyers who are willing to offer more than market price, perhaps pay all cash, have few if any contingencies and want their offer to be considered without competition from other buyers — a possible win-win for both seller and buyer.
Many listing agents and their sellers will refuse to consider preemptive offers once the date has been set. A professional Realtor can explain fully the pros and cons of making and/or accepting this type of offer.