Q: I hear that the market is pretty competitive right now. Is that true?
A: The current market that we are in is extremely competitive. I’d say more often than not, the properties that we encounter on the market are expecting multiple offers in a very short time frame from the time of coming on the market.
The market itself is very competitive. There is very low inventory and a lot of demand in our area, which is creating the multiple offer situations we are seeing.
Q: What is an offer review time?
A: An offer review time is something that you’ll encounter in a seller’s market. An offer review time is a deadline that the seller and listing agent designate for when they will review all potential offers. Typically you’ll see it from 3-7 days out from the initial listing date. At that time all offers are due and the seller and the listing agent will review them and pick the one that they like best.
Q: What should I do to make my offer more compelling in an offer review period?
A: In order to make your offer stand out and be the most competitive in an offer review situation, there are a number of approaches that you can take. It is highly dependent on what the listing agent is telling your agent in terms of what they’re looking for.
Some parties will try to submit offers early. That is a strategy that you can use, however if they are not willing to look at it until the review deadline, then your offer can be used to shop other offers. This is a risk that you have to assume when you try to submit an offer early. There are some other things you can do. If they are not going to review offers early, the other strategy is to wait until the last minute and submit your offer right before the deadline to make sure that your offer is not getting shopped among the others that they are receiving.
Q: How can I be sure that these competing offers actually exist?
A: There is no way to know for sure if all of the other offers exist unless you’re using an escalation clause and your offer gets accepted. In that case, the seller is required to provide a copy of the competing offer that bumped up your escalation clause to the amount that you agreed upon.
If you’re competing in a multiple offer situation and the agent is telling you that they are expecting 5-7 offers, you pretty much have to take their word on it. However, it is risky for the seller and listing to make up generic offers and then have the offer review period come and go and then still be active on the market. You should feel comfortable knowing that in most cases, they are getting what they tell you they are getting.