A preemptive war is a war that is commenced in an attempt to repel or defeat a perceived offensive or invasion, or to gain a strategic advantage in an impending (allegedly unavoidable) war before that threat materializes. ….Wikipedia…
A week ago I was out with one of my favourite clients looking for a new home. We saw one that we both liked for the Family and at the same time had a sense that the house was at least $100,000 under market value. On the listing however it said that offers would not be reviewed till after the weekend, Tuesday evening to be exact, giving us at least Monday and Tuesday during the day to complete some proper due diligence, including financing and certified funds.
The restriction on offers was written on the listing for agents to see and both I and my client believed that would be the case. Just to be sure, I emailed the listing agent to make them aware that my client intended to offer on the Tuesday evening.
Holding off offers has become commonplace in the Toronto marketplace. Our market has been so strong that it was hard to gauge the true value of the home until it was fully exposed to the Buyers circling it. I have suggested holding offers off when I was concerned that the Seller needed to be assured that no money was being left on the table. A listing agent’s worst fear is selling a property and having the Seller being unhappy with the price that they got. This way the Seller could hopefully rest assured that all potential Buyers have been through the home. I have always known that happy clients tell few people but unhappy clients tell everyone…being in a “word of mouth” business, it is something I always keep in mind…
Back to the story: On Monday morning when I had not heard back from the Agent, I decided to call direct and was told that contrary to what was stated on the listing, there was an offer in play and my client would have until noon to make han offer and it would have to be over asking, no conditions with a certified cheque. Banks being closed over the weekend and financial people just back to work early a 9 AM that morning, there was not time to get all our ducks in a row. Totally my fault in that I believed what had been written on the listing for all to see: “NO OFFERS TILL TUESDAY EVENING”.
If the Sellers decided to look at an offer before the date for offers, that is definitely their right to do so, but, after having waited 4 days would another day and a half be a problem? Now we have a listing that was under priced sell for over $100,000 over the asking price. If properly priced it still would have sold for the same amount of more but the Seller will never know.
So back to my story (I digress, a lot). The house sold, my client was angry as I am sure were others who lost out…. strangely the agent who sold the house was from the same Company and now the Company can go a talk about how they and their agents sold a house for over $100,000 over asking. However, one week later, I am out on an offer again and the seller who just came to the market, has the expectation that their house should sell $100,000 over asking even though it is not the same house, price or location.
The original listing agent has done no one any favours…did his client get the best price for their house? We will never know. Now expectations have been raised because a house in the neighborhood sold for over $100,000 over asking…even though it was knowingly under priced. The other selling agents look bad because maybe they should have jumped the gun, or they were showing their clients out of their market and the Realtor Community looks bad because the advertising on the MLS was not to be believed. Who benefited?
And that is why I hate preemptive or Bully Offers!
This story has a very happy ending! My client bought a great home in a wonderful location for them. All is good, they are happy and that is what matters in the end.