We are in a competitive market right now. Houses are flying off the shelves, buyers are landing in in the middle of bidding wars and sellers are still running the show. In this fast-paced and competitive market, both buyers and sellers are using all sorts of methods to come out on top. In the past year and half, we have seen the return of the offer review date. The offer review date is a date that the seller decides upon (often about a week after the home goes on the market) that they are going to look at offers on.
The offer review date can be a blessing and a curse. It is a great thing because it allows time for more potential buyers to see the property. Without an offer review date, homes have been going pending less than 24 hours on the market. It’s a difficult pace for buyers to keep up with. Having a specific date also creates an environment of competition, with buyers feeling the pressure and offering above list price. The seller has great leverage when he has more than one offer and can end up getting a higher purchase price or better terms than he would with only one offer.
Beware the offer review date… Just because it is stated that the seller is reviewing offers on a certain date, that doesn’t mean that they will. There is little to no way to hold the seller to the stated offer review date. If the seller receives an offer prior to the review date, they may just accept that offer. Although that can cause great upset to potential buyers, there is no legal recourse to make the seller adhere to the stated offer review date. The offer review date can also have a negative effect on the seller. Many buyers are burnt out on the fast paced, seller driven, competitive market. Those buyers refuse to put in an offer on a property with an offer review date, simply because they don’t want to be forced into that competitive situation. I have seen many houses have the offer review date come and go. Those houses often sit on the market much longer than comparable homes and sell for less.
In conclusion, I doubt the offer review date will be going out of style any time soon. If you are a seller, make sure you discuss the risks and potential rewards with your agent to see if an offer review date is right for your situation. If you are a buyer, make sure to keep a level head when submitting offers. Don’t let the pressure of a specific date or the threat of other offers make you pay more than you are comfortable paying.