A house went pending before the offer review date, why?
Buyers tired of getting outbid on offer review days have resorted to writing disruptive, “take it off the market today” offers. When homes new to market with an offer review date go pending early, that’s probably what happened.
The best coined term for the early offer I’ve ever heard? “The bully offer.”
Even when an offer review date is published, there’s a little secret. The listing agent is legally obligated to present offers received to the seller (at least in Washington State). So even if early offers are discouraged, they must still be passed along.
When that happens…
Sometimes agents pull the offer review date forward when an early offer comes in, and call everyone that has toured the home already. Sometimes sellers “just want it done” and accept the offer on the table. These offers play to the human desire to have a “bird in the hand” rather “than three in the bush” because multiple offers come offer review day are never a guarantee.
Whether you’re a buyer or the seller, there are pros & cons to early offers:
Win without all the competition
Lock in a contract
Make the seller an offer they can’t refuse
Offer needs to be compelling
Competing against yourself – you might pay more than you need to to win early
Potential to pay more than necessary
Showing your cards early – you may get shopped around
The early offer can become the new price floor
As a seller, it is tempting to take an early offer. So why call it a bully offer? Well, the buyer is putting pressure on you to make an early decision without all the information. The advantage of accepting an early offer is having a done deal. The downside is one will never know if money has been left on the table by accepting early.
Certainty around price
Getting under contract quickly
Multiple offers are never guaranteed and offers may not escalate as high as the one on the table
Money left on the table – someone else may have paid more for your house
Opportunity cost: a better offer may have arrived
Not ever knowing how it would have played out