A Guide for Buyers: Offers Whenever or Offer Night?
Are you getting ready to submit your first offer on a property? If so, it’s time to acquaint yourself with the offer process. In this day and age, there’s no longer just one way for sellers to accept offers.
Depending on the market, the seller may choose to underprice their home and hold back offers in hopes of creating a bidding war. On the other hand, the seller may choose to price their home according to fair market value and accept offers whenever.
From a buying perspective, it’s incredibly important to note how the seller is choosing to accept offers. Not only is it going to dictate your pricing strategy, but it also dictates how quickly you’ll have to act on a given property.
Offers Whenever vs. Offer Night
When it comes to accepting an offer, the seller can choose to do it one of two ways. Number one, the seller can choose to accept offers whenever. Number two, the seller may choose to “hold back” and only accept offers on the anticipated offer night.
Holding back offers has become incredibly common in hot markets such as Toronto and Vancouver. This is especially true for properties that real estate professionals anticipate will generate lots of interest with buyers.
Let’s touch base on the two different styles of accepting offer nights. This is going to help you better understand a home’s pricing strategy as well as how the offer process will unfold.
Offers Accepted Whenever
When offers are being accepted whenever, prospective buyers can choose to submit an offer at any given time. So, if you view a property on a Monday, you can prepare to offer on the property directly following your appointment to view the unit. All in all, this means that an offer could be accepted that very night.
It’s also important to understand that strategy that comes alongside accepting offers whenever. When the seller chooses to accept offers whenever, this means that the seller is not anticipating a bidding war. More importantly, it generally means that they are looking for a final purchase price that is similar to the asking price. Generally speaking, it’s safe to say that this is a more common and traditional means of accepting offers.
Offers Being Held Back
When offers are being held back, prospective buyers must wait until the anticipated “offer date” to submit an offer. If you view a property on a Thursday and the offer date is the following Monday, this means that you have until Monday to prepare your offer. Come Monday night, all of the offers for the property will be reviewed and a winning offer is likely to be selected.
For offers being held back, it’s crucial to understand the pricing strategy that comes alongside this type of acceptance. The strategy is to underprice the property and generate as much interest as possible before the offer night. Come offer night, multiple offers are going to draw the price upward which will result in a higher-than-ask sale price.
In this scenario, you have to assume that the property is going to sell over asking. Your real estate agent will work with the best comparables to arrive at a likely selling price. From here, you can decide just how competitive you’d like to make your offer based upon the likely selling price.
It’s also important to consider the notion of “pre-emptive” offers. While a seller may have arranged for an offer night, this doesn’t necessarily mean that they won’t consider a pre-emptive offer.
As a buyer, it’s important to understand what a pre-emptive offer is and how they are utilized. Commonly referred to as a “bully offer”, a pre-emptive offer is a strong, typically unconditional offer that is submitted by a serious buyer before the offer date.
Once received, the seller must determine whether they’re going to accept the bully offer or reject and wait until the offer night. In order for the seller to consider accepting the bully, it must be a strong enough offer that the seller believes this offer will not be matched on offer night.
This Is Where Your Realtor Comes in
Of course, all of this information can be incredibly confusing and intimidating. But, a good real estate agent will be able to guide you through the offer process and help provide a sense of clarity.
Whether the seller is accepting offers whenever or choosing to hold back, your realtor will help you put forward a competitive offer.
Find the best agent for you with Nobul and make the home buying process that much easier!