Hi, Folks. In looking for a primary residence I keep running into a slight hitch. Perhaps one property in four or five has a “bid by” date after which the seller’s agent doesn’t take - or doesn’t want to take, I’m still not sure - any more offers. The bid-by date never seems to be published on Redfin, Zillow, other similar platforms, or even the real estate company’s site. Further, these properties stay up on these platforms even after their “sell by” date. I’ve never encountered this issue in any other real estate market. Can someone recommend some literature - an article maybe, or some professional publication - that explains this issue? Or does anyone have some insight? I may be missing something, but this seems like an unnecessary impediment. Thanks in advance.
Make a bid with listing agent.
They try to signal confidence that there are multiple interested parties
Sometimes it is a bluff
Yeah, pretty weird concept, but that is the process in highly desirable locations, like Sunnyvale, Cupertino, Mountain View, Los Altos, Palo Alto, Menlo Park, etc. That was definitely the case before. Now, I’m not sure about current market condition in COVID if that is still the case.
Seller will set offer date, which is after 1 or 2 weekends of open house after listing. The offer date is typically Tuesday, Wednesday, or Thursday. On that date, they expect to get 5+ offers. Depending on the market, it can be 10+. So basically seller wants to get all the offers in at once, and seller can then pick the best offer. And it is possible to get a bidding war to squeeze out additional 10-15%.
You can always make an offer. I believe the listing agent is obligated by law/duty to inform seller on the offer. However, the seller is not stupid. If they wait just few more day until they can get a handful of offers in at same time, they are going to wait.
Now, this next step is even more crazy. The seller (and seller agent) will pick the highest 5 or so offers. And then the buying agents need to go in person and present the offer to the seller. If the offer is not competitive right off the bat, you are out. If the buying agent do not show up in person, you are likely out too. I think they do this because at that time, they can immediately do additional bidding to squeeze out additional 10-15%. So the buying agents have to sell their client to the buyer. Why should they choose you? Is it all cash offer? How solid is the financing? Is the buyer an investor or family? Etc, etc.
Most folks on this forum are investors. Investors will not buy investment property like this. However, I bought my personal home like this. That is the way it is.
I had wondered if this was the case, and still find this reasoning compelling: that the strategy here is to try to pressure you to bid before the closing date. But at least once I have been told by the seller’s agent that I had lost the ability to make an offer because I was inquiring after the deadline. What kind of selling strategy doesn’t allow the bidder to bid? Does the seller’s agent believe that the potential buyer will be even more compelled to make an offer, will beg to be allowed to bid?
You can make an offer prior to the offer date. They might or might not accept. 99% of time, they just ignore these offers. Because these early offers come from new buyers with uneducated agents and are typically always under market offers, thinking they can “steal” a bid.
If your offer comes in after the offer date, it’s likely they are already in contract; or pending contract. So obviously, they are not going to take any more offers.
If you are looking for a property in these hot areas, you should have a good agent, who should have already explained this process to you.
Use an experienced realtor
I don’t know why I didn’t respond to this advice much earlier, jk88cal, simply to say thank you for laying out the logic clearly and convincingly in two concise posts. So: thank you!