Pre-emptives

Missle

Probably as long as there has been a multiple offer environment there have been folks interested in finding a way around that kind of competition. Totally understandable really. Typically, the agent who is selling the home lists the place in the MLS and either right away or after the first weekend’s open houses sets a date to look at offers. Most of the time that date is published in the MLS itself and thus everyone knows what the game plan is for making an offer there. Sometimes a buyer and their agent wants to circumvent this process and make an offer immediately. The buyer’s agent calls the sellers agent and tells him/her that their client has an offer and wants to present it right away…not wait for the offer date. Sometimes the agent simply sends the offer via email directly to the sellers agent and asks that it be presented immediately. On almost every listing I’ve had in the last several years an agent (or 2…or 3) will call and ask if they can bring me a pre-emptive offer. The thinking with the buyer who has this type of offer is that they’ll write something FAT enough that it will motivate the seller to forget about waiting and just take their offer.

Honestly…I hate this pre-emptive thing. I think it’s way risky for everybody. You’re going to usually decide to write this type of offer after the house has been on the market only a couple of days, well before it’s scheduled offer date. From my standpoint, representing a buyer, there’s really no way to tell how much competition the house will get that soon in the process and you could easily overshoot on your offering price by acting early. From my standpoint representing the seller…you might take alot less than you could have gotten.

A month ago I had a listing in South San Francisco that was offered at $850,000. An agent told my seller directly that they wanted to bring them a $1,000,000 pre-emptive offer on the second day of the listing. They called and asked me what I thought and I told them I thought we should wait and let nature take it’s course. Risky you think? 8 days later we ended up with 10 offers and the house sold for $1,175,000.

I guess the other thing I hate about it is losing a potential home for my own buyers when somebody else gets it via their pre-emptive. In other words I hate losing!! This has happened to me alot lately too…my clients see a place, like it and ask for disclosures. On day 2, the listing agent replies that the home is sold. Huh? In one recent case the seller took a pre-emptive 2 days before the scheduled offer date…7 days into the listing! The place closed $75,000 UNDER the price we were going in at. In other words, the seller left money on the table over 2 days!

I guess that, ultimately, I believe in letting nature take it’s course. When that happens everybody has a fair chance.

 

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