Some say, 'A bird in the hand is worth two in the bush' while others insist on 'marketing until the ink is dry' BY TEKE WIGGIN Staff Writer Inman
With homes selling like hotcakes in many markets, sometimes listing agents receive strong offers almost immediately after a property hits the market.
If the agent has scheduled an open house for later in the week, that can put her in a tough spot: Should the agent advise the seller to accept an offer and cancel the event, or should she urge the seller to allow the open house to go on as planned?
The answer may depend on the strength of the offers and a range of other factors, including market conditions and local customs. Agents can take varying views on the best course of action.
But what pretty much everyone can agree on is that the seller should make the call, not the agent.
“You explain all facets of the process, and then the seller decides what to do,” said Austin, Texas-based Realtor Ryan Rogers in the Facebook group Real Estate Agent Group – Collaboration, Tips & Insights. “Be careful — seller always makes the decision. You guide them.” Still, an agent has a right to make a recommendation.
The case for canceling
Heeding the maxim “a bird in the hand is worth two in the bush,” some professionals say canceling the open house is often the best move.
The longer sellers drag their feet, the higher the risk the buyer will walk, these agents say. Buyers might feel offended if they learn a seller wants to leave them in limbo for a few days.
They also may hedge their bets by hunting for backup listings, and potentially withdraw an offer if they fall head over heels for another home.
This has happened to Melinda Schnur, a Falls Church, Virgina-based Realtor.
“Once my seller wanted to wait until the open house,” she said. “Over the weekend the two offers withdrew and found other homes. Sellers’ ploy backfired.”
Accept an offer and collect backups?
Another way to deal with the situation is to accept one of the offers, but hold the open house to collect backup offers.
If the offer a seller client accepted includes any contingencies, Anne Meczywor usually won’t cancel an upcoming open house. The Lenox, Massachusetts-based associate broker thinks clients deserve to have buyers waiting in the wings in case a deal unravels.
“Having other buyers lined up also keeps the buyer from making unreasonable demands on inspection items,” she said in the Facebook group Inman Coast to Coast. “Why stop marketing until the ink is dry and the door is hitting the attorneys’ backsides on the way out of the closing room?”
But some agents caution against this approach.
“They will remember your name as being super slimy in my opinion,” says Pittsburgh-based Realtor Wendy Kitman Weaver, referring to buyers who show up at an open house only to discover the home is under contract. “You’ve now wasted their time and they won’t forget it.”
If agents hold an open house after the seller has accepted an offer, they should inform prospective buyers and their agents beforehand that the seller is only accepting backup offers, and they ought to distribute information on comparable listings to attendees, some proponents of the strategy say.
Sticking to schedule
Absent an extremely compelling offer, agents are often best off advising a seller to hold off on making a decision until after the open house, many industry vets say. In frothy markets, sellers can potentially pass up a flurry of bids by scrapping an open house.
“The property often only shows best during an open house with ALL the lights on, fireplaces going, etc.,” noted Sacramento, California-based Realtor Jeff Grenz.
“Several of the higher end homes I marketed over the past two years were initially seen by the ultimate buyers during their personal scouting trips without their agents, who they returned with later to examine and write their offers.”
In advance of the open house, agents should update the listing with a note that it’s already received offers, and that the seller will review all offers at a specific time, industry vets say.
Many agents recommend establishing a clear protocol at the outset to ensure an open house can take place without offending or leaving buyers in the lurch.
They advise specifying an offer deadline in a listing from the very beginning, such as 7 p.m. on the Monday or Tuesday after a scheduled open house.
This sets expectations for buyers who submit offers early on, while still allowing sellers to potentially squeeze out more bids from an open house.
Matthew Jablonsky’s market is so hot that he’s stopped listing homes on Monday.
Instead, the Staten Island, New York-based broker lists on Thursday, shows the home through the weekend and holds an open house on Sunday. Buyers are told to submit their best offers by Monday evening.
“Agents are getting used to this and so are the buyers. You need to get that full weekend of showings in,” Jablonsky said. “If something comes in and blows your seller away and they want to accept something that’s fine, but I think [you’re] doing your seller an injustice by not showing it through the open house.”
The best strategy could also depend on local convention, says Kendyl Young, a Montrose, California-based broker-owner.
In markets where open houses aren’t par for the course, agents run a higher risk of jeopardizing standing offers if they decide to follow through with an open house.
But she says that’s not the case in her area.
“Therefore, we manage our buyer’s expectations accordingly,” she said. “Without that management, the buyers might take needless offense and pull an offer that could be a winning offer.”
Email Teke Wiggin.