Offer deadlines for Massachusetts home listings are very popular these days. It seems like almost every new listing has a published deadline. Why are they used and what are the advantages and disadvantages to home buyers and home sellers? Here’s a closer look at this common real estate practice.
A Look at the MA Real Estate Market
The real estate market in Massachusetts continues to be extremely active. The fact is, there are far more buyers than there are listings, so it’s a bit of a frenzy. New home listings can easily get 50+ showings within the first several days. For this reason, many sellers and their agents will delay showings until the weekend of the open house. Additionally, they will set an offer deadline shortly after, usually on the Monday or Tuesday following the open house.
Why Set Offer Deadlines for Massachusetts Home Listings?
Offer deadlines can be beneficial for both buyers and sellers. For sellers, having multiple offers will lead to the highest and best possible sale price. Buyers who love and want a home will naturally offer more knowing that there is competition. As a buyer, there’s nothing more frustrating than a home going under agreement before you’ve had a chance to see it. Thus, offer deadlines for Massachusetts home listings also give buyers a level playing field.
What Happens When There Is No Offer Deadline
To illustrate the benefits of offer deadlines, let’s consider a scenario where there is no pre-established deadline. Imagine a home gets listed on a Wednesday with an open house planned on Sunday. A buyer schedules a showing for that same day and submits an offer that evening. The offer is for full price and is only valid until the following morning. There are 15 other showings scheduled for the next several days and open houses generally attract 30-50 buyers in that market. The seller must decide how to respond to this offer before it expires, but will not know if other buyers might also be interested and be willing to offer more. This scenario is certainly not beneficial to a seller.
Most buyers also appreciate offer deadlines. Many are unable to view homes until the weekend, so they appreciate a fair opportunity to see a home and submit an offer. The downside to buyers is that competition often drives up the price. However, most buyers willingly accept that since they will at least have the opportunity to submit a bid. If you are a buyer looking to purchase a home in a hot Massachusetts market, be sure to talk to your agent about how to best position your offer and improve your chances of success.
Once your offer is accepted, you will need the assistance of a Massachusetts real estate attorney to review and negotiate a Purchase & Sales agreement on your behalf. Contact us for information on how we can help you with P&S review and closing your mortgage loan.