Risks and benefits of sellers delaying offers
I’m selling my home. What do I need to know about the delayed offer strategy process?
Generally, agents are required by law to deliver any offers received, as soon as possible, to their sellers. However, the exception to the rule is when a seller gives a written direction to do otherwise. This is commonly known as a delayed offer process – a strategy where a seller chooses to review offers only on or after a specified date and time.
If you are selling your home and considering a delayed offer process, make sure to do your research and ask your agent lots of questions so that you can make an informed decision.
Here are some benefits that could come from delaying offers, but are not guaranteed.
- Market exposure. The strategy could give more buyers time to evaluate the property, which could generate interest from a greater number of buyers and build up anticipation for the property as the offer presentation date nears.
- Competing offers. More interested buyers could result in multiple offers.
- A goal of better price and terms. More competition could result in a higher price and desired terms for you, as buyers try to make their offer the most appealing.
As well, here are some risks to be aware of.
- Buyers don’t want to wait. You risk losing out on motivated buyers who don’t want to wait for the offer date.
- Some buyers are averse to the delayed process. They might shy away from situations because of perceiving them as unfair, too hectic or pressure packed.
- Strategy doesn’t generate offers. The offer date could pass without any offers, which might make the property less desirable, appear overpriced, and remain on the market longer than expected.
Another thing to know – especially in the current real estate market – is that a delayed offer approach could prompt some buyers to submit pre-emptive offers, sometimes called a bully offer. These arrive in advance of a delayed offer presentation date in an effort to avoid a potential bidding war, in hopes of pressuring the seller into accepting it before the delayed offer date.
Think about how you would like potential pre-emptive offers managed, and give your agent clear guidance. You can expect to have to put such instructions in writing.
Keep in mind that the effectiveness of a delayed offer presentation strategy depends on communicating the date and time with prospective buyers and their agents. Your agent will publish the information on local real estate board multiple listing services and any other online selling platforms that your agent might use to promote your property.
Selling a property is a big undertaking. If you decide to switch your delayed offer approach, you must inform your agent and they will take the following steps immediately.
- Update the notes to any local real estate board listing and other online selling platforms for the property to accurately reflect the current written direction for offer presentations.
- Notify in writing anyone who has expressed an interest in the property of the change to the offer presentation date and time.
Your agent will also be responsible for making sure that all interested parties are notified of the change in a timely manner. They can do so by email, text message or written notice.
If you have a question for Joe about the home buying or selling process, please email firstname.lastname@example.org.
This column is for general information purposes only and is not meant as legal or professional advice on real estate transactions.Joseph Richer is Registrar of the Real Estate Council of Ontario (RECO). He is in charge of the administration and enforcement of all rules that govern real estate professionals in Ontario. You can find more tips at reco.on.ca, follow on Twitter @RECOhelps or on YouTube at http://www.youtube.com/RECOhelps.