Homebuyers often want to make an offer on a new listing that comes on the market on the Friday before a Sunday open house. This compulsion happens for a good reason. Buyers worry that another buyer will fall in love with the home on Sunday (or maybe more than one buyer) and there could be multiple offers. Too much competition and the buyer may lose their dream home. It's a valid concern. Here's what homebuyers should expect in this situation along with strategies for making a winning offer.
- An early offer has to be especially convincing because most sellers want to give their home time on the market to collect bids.
- Buyers can give their early offers an edge by including a heartfelt letter, giving the seller extra time to move out, or some other concession with the closing process.
- Other strategies, such as setting a deadline for acceptance or offering the list price, may ultimately backfire.
Listing Homes for Sale on Friday
Listing agents, for the most part, prefer to put a home on the market on Friday while promoting a Sunday open house. Going live at midnight on Thursday is best because Friday is the best day to list a home. Flipping that switch in their Multiple Listing Service (MLS) at midnight allows all the photographs to download across many platforms, making the images available first thing Friday morning.
The way this often works is that buyers open their morning email with new listings. Then they call their agents and ask to view the home right away because they don't want to wait for the open house. After all, it's not unusual, especially in a seller's market, for buyers to immediately flock to a new listing, eager to make an offer. This is when buyers may turn to their agents and demand to write an offer on the spot.
Potential for Problems
One potential problem is that, often, sellers might say they prefer to look at all offers after the open house on Sunday. They want the longest exposure possible on the open market and prefer to give a large number of buyers an ample opportunity to bid on the home.
A preemptive offer would need to be mighty attractive for a seller to accept that offer instead of waiting out the results from the open house. Not to mention, even if the seller accepted the purchase offer, the listing agent might still be expected to hold an open house anyway. It's difficult to cancel an open house at the last minute when it's been advertised everywhere online.
Common Practices for Early Offers
There are some moves that buyers often make when putting in offers on homes just before the property has an open house. Here are these common practices, along with some considerations.
Setting a Deadline for Acceptance
Ideally, the buyer wants the seller to accept the offer immediately. They hope the seller might think that it's the proverbial bird in the hand.
An early offer might make the seller wonder if they are losing out on potential profit by taking this early offer from an excited buyer. To push the seller, buyers might give the seller a short deadline for offer acceptance, say by Saturday evening, at which point the offer will expire.
This is meant to induce action, but it doesn't always work, and it could backfire. A seller could resent the pressure. A seller could also make a counteroffer, which would restart the clock for acceptance.
Offering the List Price
To buyers, offering the list price is a sign of good faith, meant to show they are serious and committed. A seller, however, might wonder if they could get a higher price after other buyers tour the home before and/or after the open house. They might wonder if the price is too low. A million thoughts race through sellers' heads at this time, often making them hesitant about taking any action at all. They could freeze on you.
Believing Cash Trumps
Some buyers will make an all-cash offer and hope that in exchange the seller will make other concessions. Perhaps the seller will accept an offer with a contingency to sell an existing home or be willing to endure a longer than necessary closing period due to receiving the cash offer. A cash offer means no lender requirements, no bank appraisal, and no chance of the buyer not making it out of underwriting, where many things can go wrong. But many sellers realize it is all essentially cash at closing, regardless of its origin. They might not jump at a cash offer just because it's a cash offer.
Tips for Making an Offer Before the Open House
Sellers should continue with plans for the open house unless they receive a super stupendous offer and, even then, they might not accept that offer until after the open house. It's up to the seller to make that decision.
If the seller is serious about waiting to accept an offer until after an open house, there are still ways for the buyer to make a solid offer and all but ensure the seller will accept. A seller should also let the buyer's agents know upfront that they'll most likely hold out for the Sunday open house.
One way to sweeten any offer is to include a higher-than-normal earnest money deposit. This signals to a buyer that you're serious.
So if buyers want to have an edge in offer negotiations, they need to act quickly and submit a strong offer. Let's say the seller receives an offer a little bit higher than the list price. This will often excite a seller and tend to make the seller feel kindly toward the potential buyer. Buyers can throw in a few more things, too, to make the offer more attractive:
- Write a heartfelt letter to the seller about your situation and why you want to buy the home.
- Give the seller a little bit of extra time to move out without charging them rent.
- Offer to absorb a few closing cost fees a seller would typically pay that wouldn't interfere with an appraisal, but would net the seller more money.
- Offer to buy the home without an appraisal contingency (be sure to discuss the pitfalls of this strategy with your agent).
- Submit a clean offer, backing it up with substantial documentation such as proof of funds and a preapproval letter.
Who do you think the seller will think about all weekend, from Friday morning to Sunday afternoon? The seller will be thinking about you and your offer. The seller will be wondering if they should accept your offer. Then, after the open house, even if there are multiple offers, the seller will likely gravitate to the patient buyer who submitted an offer above list price on Friday and quietly waited for an acceptance.