Welcome to the latest episode of “What’s Working Now!”
Homebuyers and real estate agents alike often misunderstand the power of deadlines. Today, I’ll go over the pros and cons of including a deadline with your offer.
Recently, one of my buyers settled on a house that was brand new to the market. The house went up for sale on a Thursday, and the agent asked for offers by next week. My buyer really wanted this house, so I said, “If you write a compelling offer that is too good to be true, we can include a deadline and make them answer us tonight before midnight.”
The offer was all cash with no contingencies. The buyer offered to settle in four days and even included a rent-back that allowed the seller to stay in the home, rent-free, until August.
The seller had four hours to make a decision. The agent wasn’t prepared to accept offers so early and the sellers were traveling. Still, we required an answer by 11:30. They answered with thirty seconds to spare and we had a ratified contract!
While the deadline certainly helped this buyer, deadlines aren’t always a good idea. I had another buyer who wanted to make a full-price offer with a 24-hour deadline. I explained that the 24-hour deadline was not a good idea.
Basically, this buyer was giving the seller 24 hours to call every prospective buyer that had been through the house and find a better offer. Deadlines are best used when you are making a compelling offer that’s too good to be true. In this market, a full-price offer is simply not that compelling.
It’s very important that you work with an agent who understands when to harness the power of deadlines. After all, this market is very competitive, and you don’t want to give other buyers the chance to sneak in and get the house.
Thank you for watching “What’s Working Now!” Next time, I will have some advice for home sellers. Even though this is a hot market, you do need a strategy to sell your house for more than its market value.
In the meantime, if you have any other questions about deadlines or writing a compelling offer, just give me a call or send me an email. I would be happy to help you!