Your agent suggests that since your objectives as a seller are to cinch a quick sale and to maximize your net proceeds, marketing your home with the Sealed-Offer Selling™ model might be the ticket. You’ll accept offers for a pre-determined period of time (i.e. three weeks) with offers being placed with a neutral third party (like a title company) until the time frame has elapsed. Then you’ll review all offers at once to accept one, reject others, or perhaps make counter offers on one or more.
Then it happens---a cash buyer walks through the door, wanting to know if you’ll set the house immediately to him. You relent; but it continues to haunt you. What did you pass up, if anything, by not staying the course accepting sealed offers from other potential buyers?
Unfortunately, only time will tell if you did the right thing by bailing out on the sealed-offer marketing approach. If the sale closes without a hitch, it was good to accept the cash buyer’s offer. If the sale falls through, you’re back to square one in locating a buyer and completing a sale.
It’s important to realize the latitude this approach affords sellers. First, you have a predetermined period of time (depending on the marketing time for your type of property) and then evaluate all of the offers submitted in an organized and business-like fashion. Since a seller often jumps at the first offer for fear of not receiving a second, the Sealed-Offer Selling™ approach allows the seller to gather offers, evaluate each on individual merits and decide which (if any) best meet his objectives. This could mean accepting one, making counter offers on several, or eliminating all if they fall short. As the seller, you could specify when the property would be available for showings, the minimum price and earnest money suggested, as well as which contingencies (if any) you’ll consider in the offers.
Even though some buyers won’t like the idea of waiting three weeks to hear if their offer has been successful, others feel it’s a very fair way to get the seller to consider all offers other than just those initially presented. Additionally, if a buyer is really motivated to purchase your house, he/she may offer more than the suggested list price and/or build language into the agreement to “meet or beat” any verifiable offer up to a maximum of “x” dollars. It’s a great way to build negotiation into the purchase agreement.
What could backfire by taking the cash offer prematurely before the sealed-offer timeframe had run its course? It’s tough to say. There might have been a higher cash offer awaiting your approval. Contrarily, offers could have been sparse and/or filled with contingencies that you’d never accept. You rolled the dice and accepted the consequences.
But there’s one step you could now take to hedge your bets. You might want to view the offers on file with the title company and potentially take one as a back-up offer to the one you selected. In fact, if there are two strong offers, take them both as back-up. If your cash buyer is solid, he has nothing to worry about with offers in second and third place. If he isn’t solid and you don’t have buyers waiting in the wings, you are the one with the worries!
Sealed-Offer Selling™ has pros and cons just like any other real estate sales model. It can buy you precious time to gather offers, yet cause you to forsake options for the first glimmer of quick cash. No matter which method(s) you use to sell your home, it’s important to stay focused on the big picture---maximizing time and net profit in the sale.
Sealed-offer-Selling™ is a trademark of the National Association of Real Estate Consultants™ located in Indianapolis, IN, (866)-260-7374.