Real Estate sale question. Reasonable offer expiration time period?

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CedarWaxWing
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Real Estate sale question. Reasonable offer expiration time period?

Post by CedarWaxWing » Mon Aug 27, 2018 2:57 pm

Scenario:

I am selling a house I lived for 9 years, then rented for 27 years.

It was pretty abused by renters and negligent property managers, and now that I am retired I felt it was a good time to sell to reduce risk, harvest

increased values, and simplify life. (House is also 30 miles away.)

We did a VERY nice job on the remodel, with emphasis on make this house very sound and as trouble free as possible, and very comfortable to live in.

The consensus is that we have done a super job and it also shows very well.

I have a realtor, and it has been listed with one 2 hour open house on Saturday.

Three offers are supposedly on the way from that open house.

However: In my presence the realtor later that day took a call from another realtor, and mentioned she she expected two other offers imminently.

My realtor then told this buyer's realtor that she suggests their offer be submitted by Tues to be reviewed and presented to us by my realtor on Wed... and my realtor suggested they submit the offer to expire withing 24 hours.

Question: How can that possibly be in my best interest to have an offer expire in 24 hours rather than perhaps 7-10 days when one more open house next weekend may bring in more interest?

Is there anyone other than my realtor who benefits by a short expiration time of the offer?

When I questioned that, the realtor says... " well, it's a hot sellers market and this works better".

"This is how we do it here." Does not work for me unless the promoter of that method call elucidate clearly WHY. Being able to elucidate lends credibility to the plan imho.... because it seems to help the realtor but not us.

(But she is not able to explain in English WHY that is in my best interest... making me think she did that because it helps her get the thing sold quickly rather at the highest price.

This house has no loans, and we have been working on it since January.

I have noted more than once that the goal is to get the best price for a house that is best in class for a starter house about 1000 sq feet, single story in a very safe and quiet neighborhood.

This is a very hot sellers' market btw.

We are not financially distressed.

Thanks for your thoughts.

ResearchMed
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Joined: Fri Dec 26, 2008 11:25 pm

Re: Real Estate sale question. Reasonable offer expiration time period?

Post by ResearchMed » Mon Aug 27, 2018 3:15 pm

CedarWaxWing wrote:
Mon Aug 27, 2018 2:57 pm
Scenario:

I am selling a house I lived for 9 years, then rented for 27 years.

It was pretty abused by renters and negligent property managers, and now that I am retired I felt it was a good time to sell to reduce risk, harvest

increased values, and simplify life. (House is also 30 miles away.)

We did a VERY nice job on the remodel, with emphasis on make this house very sound and as trouble free as possible, and very comfortable to live in.

The consensus is that we have done a super job and it also shows very well.

I have a realtor, and it has been listed with one 2 hour open house on Saturday.

Three offers are supposedly on the way from that open house.

However: In my presence the realtor later that day took a call from another realtor, and mentioned she she expected two other offers imminently.

My realtor then told this buyer's realtor that she suggests their offer be submitted by Tues to be reviewed and presented to us by my realtor on Wed... and my realtor suggested they submit the offer to expire withing 24 hours.

Question: How can that possibly be in my best interest to have an offer expire in 24 hours rather than perhaps 7-10 days when one more open house next weekend may bring in more interest?

Is there anyone other than my realtor who benefits by a short expiration time of the offer?

When I questioned that, the realtor says... " well, it's a hot sellers market and this works better".

"This is how we do it here." Does not work for me unless the promoter of that method call elucidate clearly WHY. Being able to elucidate lends credibility to the plan imho.... because it seems to help the realtor but not us.

(But she is not able to explain in English WHY that is in my best interest... making me think she did that because it helps her get the thing sold quickly rather at the highest price.

This house has no loans, and we have been working on it since January.

I have noted more than once that the goal is to get the best price for a house that is best in class for a starter house about 1000 sq feet, single story in a very safe and quiet neighborhood.

This is a very hot sellers' market btw.

We are not financially distressed.

Thanks for your thoughts.
Having worked with several agents over the years (as buyer and as seller), and sold/bought some on my own (no agent), I cannot imagine this ploy without telling you FIRST.
I'm not sure how having a single early offer get this restriction (might it be a friend of agent, and thus reason to pressure you??) benefits you. However, IF it might, agent should have discussed with you.

AND I don't understand why all offers wouldn't have same restriction, if they are on the way, etc.
We have indeed seen similar short windows, but ALL prospective buyers were aware of the time limit. In a case like that, it can indeed generate some "action".
Or not - nothing is ever guaranteed.
But YOU are the seller, etc.!

How did you find agent?

Is there a broker over him/her at the main office?

I would NOT trust this person.

RM
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maggabelle
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Re: Real Estate sale question. Reasonable offer expiration time period?

Post by maggabelle » Mon Aug 27, 2018 3:26 pm

An agent should never say there is another offer on the way. They should only ever say if there is another offer and only after they have checked with you first. They are not allowed otherwise to disclose that information.

Frequently a buyer will make a short offer period because they don't want someone else to swoop in and make an offer. They want you to have to decide and not turn it into a multiple offer scenario where the price might go up. Most buyers make 24 hour periods because if they don't get your house they want to move on. A long period for the seller to decide only benefits the seller, not the buyer. A short period only benefits the buyer, so your agent was giving bad advice in terms of representing you.

adamthesmythe
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Re: Real Estate sale question. Reasonable offer expiration time period?

Post by adamthesmythe » Mon Aug 27, 2018 3:32 pm

CedarWaxWing wrote:
Mon Aug 27, 2018 2:57 pm
Scenario:

Question: How can that possibly be in my best interest to have an offer expire in 24 hours rather than perhaps 7-10 days when one more open house next weekend may bring in more interest?
Suppose an out of town buyer is in town for a few days to buy a house.

He will make an offer on his first choice with a 24 hour short fuse. If that doesn't work he will move on to number 2 and number 3.

There can be other reasons. Maybe a buyer really wants the house, and hopes to get in before other buyers with a high offer, hoping that the seller will take a very good offer instead of holding out for the possibility of an even better offer.

Selling and buying houses is a game played against an opponent where both players have insufficient information. There is some signalling however- often ambiguous. Saying you won't review offers for a week might mean you are certain of a bidding war. OR it might mean you aren't sure you want to sell. Or it might just mean you are hard to work with.

Having said that- your realtor should have discussed strategy with you.

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jfn111
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Re: Real Estate sale question. Reasonable offer expiration time period?

Post by jfn111 » Mon Aug 27, 2018 3:44 pm

If I make an offer, for a client, and I don't have an answer back within 24 hours I assume they're fishing for a higher offer and we move on to look at other houses. (Unless the listing specifies that all offers will be looked at on X date). It's also in the sellers best interest to tell a potential buyer they have offers coming in. This encourages the buyer to write higher.
As a side note- I have an appointment in 2 hours to take my buyers on a second showing. I called the listing agent to see if they had any offers? If the answer had been yes then that would influence how I would advise them to proceed.

maggabelle
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Re: Real Estate sale question. Reasonable offer expiration time period?

Post by maggabelle » Mon Aug 27, 2018 3:52 pm

jfn111 wrote:
Mon Aug 27, 2018 3:44 pm
If I make an offer, for a client, and I don't have an answer back within 24 hours I assume they're fishing for a higher offer and we move on to look at other houses. (Unless the listing specifies that all offers will be looked at on X date). It's also in the sellers best interest to tell a potential buyer they have offers coming in. This encourages the buyer to write higher.
As a side note- I have an appointment in 2 hours to take my buyers on a second showing. I called the listing agent to see if they had any offers? If the answer had been yes then that would influence how I would advise them to proceed.
Just because an agent says no doesn't mean there isn't one. The agent can only disclose one way or the other if the seller authorizes it. And I would NEVER say there was an offer coming - only whether we had one or not - with seller permission. I've had too many promises of offers that never materialized to count on something I haven't seen.

CedarWaxWing
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Re: Real Estate sale question. Reasonable offer expiration time period?

Post by CedarWaxWing » Mon Aug 27, 2018 4:02 pm

maggabelle wrote:
Mon Aug 27, 2018 3:26 pm
An agent should never say there is another offer on the way. They should only ever say if there is another offer and only after they have checked with you first. They are not allowed otherwise to disclose that information.

Frequently a buyer will make a short offer period because they don't want someone else to swoop in and make an offer. They want you to have to decide and not turn it into a multiple offer scenario where the price might go up. Most buyers make 24 hour periods because if they don't get your house they want to move on. A long period for the seller to decide only benefits the seller, not the buyer. A short period only benefits the buyer, so your agent was giving bad advice in terms of representing you.
Any suggestions on how long the sellers agent should ask the expiration time to be?

I would think a week is very reasonable... and gives time for seriously interested buyers to improve their offers if they so desire. The only down side I see to that is that it is more work for the agents.

Thanks for all for the responses.

Tal-
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Re: Real Estate sale question. Reasonable offer expiration time period?

Post by Tal- » Mon Aug 27, 2018 4:08 pm

I wouldn't sweat it.

All realtors have a slightly different process, and use different tactics and verbiage to handle multiple offers, incoming offers, other agents, other agents' clients, and so on. And, perhaps more importantly, they will involve the seller in micro-decisions to various degrees. If you're anything like me, I want to manage every single detail. But, if you're like me, it's also probably in your best interest to remember that you hired the realtor to represent you, and to give them a bit of trust...

On a related note, the 24 hour expiration is not a big concern. If I'm buying and I haven't heard back in 24 hours, I've already moved on. If I hear back after that (and I have), I've always treated that as a pleasant surprise. And, just because an offer has technically "expired" does not mean that you can't still counter it! Few initial offers are accepted outright; there is always back-and-forth as the price and terms are finalized. Even if it takes you three days to respond to a one day offer, I'd expect to enter a normal negotiation from that point forward...

It sounds like you've done a great job on the house, and that you're in great shape. And while you can always ask him/her questions, for now, I'd encourage you to simply trust your realtor.
Debt is to personal finance as a knife is to cooking.

CedarWaxWing
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Re: Real Estate sale question. Reasonable offer expiration time period?

Post by CedarWaxWing » Mon Aug 27, 2018 4:13 pm

ResearchMed wrote:
Mon Aug 27, 2018 3:15 pm
Having worked with several agents over the years (as buyer and as seller), and sold/bought some on my own (no agent), I cannot imagine this ploy without telling you FIRST.
I'm not sure how having a single early offer get this restriction (might it be a friend of agent, and thus reason to pressure you??) benefits you. However, IF it might, agent should have discussed with you.

AND I don't understand why all offers wouldn't have same restriction, if they are on the way, etc.
We have indeed seen similar short windows, but ALL prospective buyers were aware of the time limit. In a case like that, it can indeed generate some "action".
Or not - nothing is ever guaranteed.
But YOU are the seller, etc.!

How did you find agent?

Is there a broker over him/her at the main office?

I would NOT trust this person.

RM
[/quote]

I suspect that the others that day may have been instructed to have a 24 hour expiration, after a Tuesday night submission. And the seller's agent did say we would review the offers Wed.

I still find it less than ideal, since a longer time period gives all offers a chance to get into the mix and some bartering to happen with more offers at once. I see lots of upside for a seller that way, and no downside from a seller's perspective...

If an RE disagrees, I would think that could be discussed in clear sensible terms, but the RE seemed a bit flustered when I asked. Then again, in theory, that person is supposed to be more effective than I at managing this process. (However, that should mean the rationale is explainable.)

mptfan
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Re: Real Estate sale question. Reasonable offer expiration time period?

Post by mptfan » Mon Aug 27, 2018 4:14 pm

maggabelle wrote:
Mon Aug 27, 2018 3:26 pm
Frequently a buyer will make a short offer period because they don't want someone else to swoop in and make an offer. They want you to have to decide and not turn it into a multiple offer scenario where the price might go up. Most buyers make 24 hour periods because if they don't get your house they want to move on. A long period for the seller to decide only benefits the seller, not the buyer.
+1 As a buyer, I would never make an offer that was good for more than 48 hours, preferably until the end of the next day.

CedarWaxWing
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Re: Real Estate sale question. Reasonable offer expiration time period?

Post by CedarWaxWing » Mon Aug 27, 2018 4:35 pm

mptfan wrote:
Mon Aug 27, 2018 4:14 pm
maggabelle wrote:
Mon Aug 27, 2018 3:26 pm
Frequently a buyer will make a short offer period because they don't want someone else to swoop in and make an offer. They want you to have to decide and not turn it into a multiple offer scenario where the price might go up. Most buyers make 24 hour periods because if they don't get your house they want to move on. A long period for the seller to decide only benefits the seller, not the buyer.
+1 As a buyer, I would never make an offer that was good for more than 48 hours, preferably until the end of the next day.

If I were a buyer I would likely do the same... but as the seller, I would like to see as many offers as possible at one time early on.

mortfree
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Re: Real Estate sale question. Reasonable offer expiration time period?

Post by mortfree » Mon Aug 27, 2018 4:37 pm

In my case, I realized that the realtor selling my house did NOT work for me. The realtor works for their company.

OPs situation kind of sounded similar.

YMMV


As for the time expiration, as a buyer you will run into sellers who just don’t seem like they are ready to sell. So a time limit helps the buyer in the case where the seller is stalling for other offers.

CedarWaxWing
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Re: Real Estate sale question. Reasonable offer expiration time period?

Post by CedarWaxWing » Mon Aug 27, 2018 4:52 pm

mortfree wrote:
Mon Aug 27, 2018 4:37 pm
In my case, I realized that the realtor selling my house did NOT work for me. The realtor works for their company.

OPs situation kind of sounded similar.

YMMV


As for the time expiration, as a buyer you will run into sellers who just don’t seem like they are ready to sell. So a time limit helps the buyer in the case where the seller is stalling for other offers.
That's why I asked the REA for an explanation... if someone can at least explain a strategy that means something. If they cannot explain the thought process... that means something else.

This house gets better as people look into the level of care and thought that went into the remodel, so other than distance it would be easy for me to sell, but I do have other pressing duties for now. :)

I considered selling it myself. It is 30 miles away, with bad traffic between home and that house. Going there several times per week for 8 months for remodel tasks, and supervising the work being done was getting old.

With summer is coming to an end I would rather get it sold as efficiently as possible and not have to sell during the fall/winter holiday seasons.

That would have likely resulted in less house buyers looking, and a house empty for too many months during cold weather season. If it was a mile away, and this was April I might have sold it myself. I also have a few more rentals to sell closer to my home, but want this one done with before the years end so I can sell one per year and not get into a 20% LTCGains situation unnecessarily. ( ( have had these homes for decades and it is time to de-risk, and simplify efficiently.

I interviewed several realtors for the listing, and not one of them seemed better than the others. For the most part they were not showing me how they would get a better exposure or presentation than anyone else. I chose the one I chose because of a referral from a happy customer I know.

ww340
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Re: Real Estate sale question. Reasonable offer expiration time period?

Post by ww340 » Mon Aug 27, 2018 4:58 pm

If you are truly in a hot area, your buyers cannot afford to give you a week or two to decide if you want to take their offer or continue to wait for a better one.

You might find a buyer that is not in any hurry, but most need to buy and get themselves settled.

I would never agree to a longer period than 24 - 72 hours.

CedarWaxWing
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Re: Real Estate sale question. Reasonable offer expiration time period?

Post by CedarWaxWing » Mon Aug 27, 2018 5:06 pm

Very possible... I would have hoped the realtor would have said so when I asked "why".

As the realtor is supposed to represent me ... she could have suggested something longer, and let the buyer's REA decide. Just saying. :)

Thanks to all again.

maggabelle
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Re: Real Estate sale question. Reasonable offer expiration time period?

Post by maggabelle » Mon Aug 27, 2018 5:41 pm

CedarWaxWing wrote:
Mon Aug 27, 2018 5:06 pm
Very possible... I would have hoped the realtor would have said so when I asked "why".

As the realtor is supposed to represent me ... she could have suggested something longer, and let the buyer's REA decide. Just saying. :)

Thanks to all again.
Your real estate agent shouldn't be suggesting a time to the other agent for when the offer should expire. That's up to the buyer and the buyer's agent.

If I've been told that offers are coming, but I don't have it in hand, I don't say anything about it because what if it never materializes? It's worthless if it doesn't happen. I don't even tell the seller that I've been told an offer is coming, because it's meaningless unless it actually materializes.

There is an agent in my town that ALWAYS says she has other offers, but then the house never goes pending... she's known for lying about that by all the other agents.

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