"Offer date set for tuesday at noon." We have all seen many MLS listings with different variations of this note. Clearly it is meant as a direction, a fact - no offer will be viewed or entertained until the set date.
In a market we have been experiencing when there are two few listings on the market for the number of buyers, holding off on offers until a certain date makes sense. The hold off allows all interested parties to view the property, establish the value (to themselves) and contemplate making an offer on the set date. Makes perfect sense - a win win for all involved. The seller gets great exposure and perhaps people competing to buy his or her property, and the buyer gets to get all his or her ducks in order.
Except for the pre-emptive offer or the "bully offer." The bully offer enters the picture and creates an unlevel playing field. Everything changes with the registration of the bully offer. Usually the buyer rep wants to jump the queue when his client is willing to put forward an amazing offer, and certainly doesn't want to risk the chance of losing the house by competing with others. The price is extraordinary with a very short irrevocalbe date to the seller. All very tempting to the seller and selling agent. What to do?
Often the process goes like this:
Buyer agent (BA): I want to register an offer on the property.
Selling agent (SA): Offer date is set for tomorrow evening.
BA: My offer is good for today only and will expire in a few hours
SA: How good is your offer?
BA: Extremely good, unconditional and $50,000 over list price.
SA: Send it over, I will connect with my seller and get back to you.
RECO has rules for what the selling agent must now do. He or she must inform his seller of the registration of the offer, and notwithstanding the direction concerning the offer date in the MLS listing the offer can be viewed and dealt with. All offers registered on the property must be notified and dealt with of course.
But what about all the buyers, and buyer reps who have been waiting patiently for offer day? Technically they are out of luck unless they have registered an offer.
So, does this process work well for all concerned? Absolutely not. The seller is put under pressure with an extremely good offer - the selling agent doesn't want to advise the seller to hold off for offer date just in case no other offer materializes.
More often than not, the selling agent and client make the decision to deal with the offer. Better realtors will now take the time to inform all that have shown an interest in the property and notify them of the change of offer date time. The listing will be rerun with the reference to offer date set time removed. (company policy at RE/MAX Hallmark) If the selling agent is fortunate, other offers will materialize and now the original bully offer is in competition.
But what about selling reps who simply follow RECO rules and only deal with registered offers? According to RECO, nothing is wrong and life goes on for all. But is it good for all, is it good for our industry?
The simple solution would be have selling realtors get an acknowledgement from their sellers at the listing table concerning offer dates. An acknowledgement from the seller concerning the date set (if any) for offer presentations, which cannot be moved forward. This text could be embedded in the listing agreement and initialed by the seller.
Or else we could continue on wasting the time and angering many prespective buyers, while draining our industry of credibility in the eyes of the public.
Or, just wait for the problem to disappear when the selling market softens.
I prefer we do something now.