Pre-Emptive Offers - Strategic or Desperate?

I haven't seen to many of these listings in Charlotte to-date despite a strong market and very low inventory. I do see deadlines for offer submissions on foreclosure and short sale homes on occasion when they have received a plethora of offers.

There is never a point to upsetting the seller with a lowball offer.  Buyers agents should advise there customers to put in their highest and best offer in my market because we have a very low inventory.  Most sellers will just reject lowball offers.  They won't even bother to negotiate them. 

I recently had one such offer on a listing, the seller ignore it.  Other offers came in and then the buyer came back with an offer that would have been accepted if it was sent two weeks prior instead of that low offer.  However, the seller had just accepted another offer.  The buyer was upset.  You snooze, you lose.

Interesting post.  This is something we have not had to deal with in our business but I can see where it could be a problem.  I guess it's similar to an auction, if you get the home the nagging feeling is "did I pay too much?"

I don't like having to tell prospective buyers that there are other offers coming.  At least one buyer accused me of trying to jack the offering price up.  Now I tell them, do whatever you think best, I'm just giving you the most current information available.

As a listing agent, I look for price sure...but lets not forgot the other legs on the stool either...We want to perform in a prescribed time with little or no hiccuping...

Karen.. the market is crazy.. In our area. a property came onto the market, . Someone came in and offered a bid too good to refuse the first day and the owner accepted it. However, other agents discovered what had happened , cried foul. and then placed their own bids.. The seller proceeded with the first buyer (all signed within 2 days)  and lost on a few extra Hundred Thousand dollars.  The listing agent was not a local agent, and did not realize what she could have obtained for her seller...

As a buyers agent you always want the seller to accept your offer but the sellers are not stupid nor living in a bubble. They've heard how the market is & at least they owe it to themselves for one go around with a bidding war.

Here are my thoughts. It is a seller's market. I prep my buyer to make their highest and best offer if they really want the home.

The purpose of a pre-emptive offer should be to wipe out the competition. No point in making a low ball offer where the seller "respectfully declines". The buyer can put in an appraisal contingency to avoid overpaying for the property. This works well for buyers who need financing.

Karen - Hello again, my Livermore friend!  In our local market, if one is going to make a pre-emptive offer it had better be a darn good one!  Things are still moving very quickly here and multiple offers on desirable properties is still happening all over.  When working with buyers, we do our best to educate them about the current market and what making offers will entail to have a shot.  Conversely, it is (almost) amusing when our sellers say they are "insulted" when an offer just a few percentage points below list comes in!  Again, we have to do some educating with them as well.  Great post!

In a wild market like this you have to take your chances. If you wait too long than you can lose the market and the house becomes dull. The best offers usually come early.

Interesting. I guess when you find the place you want you may need to be creative at times to ensure YOU are the one with the winning bid!

"There are circumstances where this technique may be advantageous for both sides. Weigh your options, and proceed with caution!"  This is a very good post and I think that this quote says it all for me.

Karen - We have a difficult job these days, so many options, and opportunities and each one comes with pros and cons.  Great post!

Karen, most listing agents in Silicon Valley have explained the advantages and disadvantages to the seller during the listing presentation and sellers almost always decide to not entertain pre-emptive offers.  

I think that submitting an offer with a very short time fuse for the sellers acceptance can work in many markets.

Hi Karen -  Hope you're doing well!  Good post and hope to see you back posting more frequently on AR.

The factors can change from day to day, always wise for a client to listen to their agent. Nicely done.