In most real estate markets, sellers put their hopeful sale price on a house and wait for a buyer to come along and make an offer. In some of the most active markets, many homes are sold by pricing them just under value by a few thousand dollars to draw attention. But in San Francisco, and some of the most attractive parts of the Bay Area, homes are almost arbitrarily priced far far below value and sellers invite the buyers to compete. Many times this results in the best possible sale price and terms for the home.
But sometimes it doesn’t! This may be either because the home was mis-priced from a marketing perspective, or the timing was bad, or there was a competing home that stole all the attention that week. In that case, we may see sellers raise the price to one they would accept. Or maybe they leave the price the same but just tell everyone who asks what they would take. It can be very complex and confusing. My team spends a lot of time tracking down all of this information for our buyer clients.
A new trend has been to use “transparent pricing,” in San Francisco from the beginning.
Regardless of the pricing strategy, many times there is an offer date. Usually it is set about two weeks after the property initially goes on the market. Then there are rules and things are fairly orderly as long as the seller sticks to their offer date and does not entertain a “pre-emptive offer.” Offers are submitted and usually reviewed and responded to the same day by the seller. But if there are no offers, or very often right from the start with homes with “transparent pricing,” offers will be reviewed “as they come.” In this case, the timing is controlled by when an offer comes in. Then there are no rules and the best play is to move fast. Once a property becomes in play it might just sell in a matter of moments if the offer is to the seller’s liking. Once an offer is received, the listing agent may (or may not) quickly let everyone know that they have received an offer and when the seller plans to respond. One time we showed a client a property where we knew there was an offer on the table. She went to a yoga class to think about it and the house sold while she was in the class. As my old broker used to say, in real estate, time is never your friend. Many times, a home that is taking offers “as they come,” will sell, even after sitting for weeks, because the right buyer just came into the market. When a property a client has viewed and expressed interest in receives an offer we want to make sure that you have the opportunity to decide to proceed or not in time to write an offer.
A “pre-emptive offer,” is one that is presented either before an offer date has been set or before an offer date that is announced. Sometimes sellers will be willing to entertain a “pre-emptive offer” before they have set an offer date in the first few days of marketing. That is generally considered OK because they seller has not really declared they will be waiting. But sometimes, even after being asked to wait for the date, a buyer will present an offer anyway. If an offer is given to a listing agent they must tell the seller about it unless the seller has specifically instructed them not to do so. Sometimes, then, the seller is tempted to work with this offer or will ask their agent to, as above, quickly call all interested parties to see if anyone else wants to submit one. Generally, though, if there is sufficient activity on a property, the seller will wisely wait for the offer date and ask the buyer to re-submit the offer at that time. Working with a pre-emptive offer when an offer date has been officially set can be seen as unfair because other people have been planning and working toward that date.
For expert navigation of this complex market on the seller or the buyer side, we are here to help!