‘Delayed seller’s review’ takes center stage in Seattle market

In a recent column, we discussed a few of the reasons why more than 80 percent of all people who attempt to sell their home without a professional agent would never do so again.

Since then, real estate agents chimed in with other examples, including one woman who teaches a For Sale By Owner (FSBO) class. She originally offered the class betting that her students might one day return as paying clients. She has been rewarded with more former students than she’d ever imagined.

The common “mistake” thread centered on an owner’s inability to price and deal with potential offers in a hot market. The professionals said that few owners know the best way to handle multiple offers and are too eager to accept the first great deal signed by a potential buyer.

According to the Northwest Multiple Listing Service, most members are now including in their listings a “delayed seller’s review of offers.” It is sometimes written as “offers, if any, will be reviewed by X date.” The clause has not only slowed the rush to be the “first in” with an offer, but it has also encouraged potential buyers to perform a thorough due diligence step before entering the fray.

“The clause is written in the MLS both ways,” said Steve Kennedy, a veteran ReMax agent. “One is a little less presumptuous. However, both mean the seller is putting all cooperating brokers on notice that if an offer is written, it won’t be answered before a predetermined date.”

Some sellers handing the purchase and sale documents omit the clause and accept an attractive first offer. In a hot market, they are giving up the chance of a higher offer, even a bidding war, by accepting the first “bird in hand.”

“The broker has an obligation to present all offers to their client,” Kennedy said. “Brokers also have an obligation to their clients to get an answer as soon as possible from the seller. So stalling by a seller is frowned upon, unless the delayed seller’s review is posted. Listing agents must have a signed seller letter on file with the MLS requesting the delayed review.”

Sellers handing their own deals, known as FSBO sellers, typically do so to avoid a commission in a hot market. But not properly pricing and exposing the home will not bring true market value and usually “washes” the commission that would have been paid to an agent.

FSBO sellers also underestimate the importance of the delayed sellers review-as have some full-time salespersons. The practice has slowed activity during the first two days a home hits the market.

“Interestingly, new listings without the delayed review restrictions are often not selling immediately, but in a few days or within a week there are suddenly multiple offers,” reported Kathy Estey, a broker with John L. Scott. “Many buyers are just not willing to compete, so they wait to see what happens with a new listing, then ultimately end up in competition.”

It used to be that a buyer submitted an offer “subject to” accepting its physical condition, reviewing and approving a preliminary title report, and obtaining acceptable financing. In a popular neighborhood, this due diligence is completed before submitting an offer, giving it a “clean” look an owner is more readily to accept.

If the owner takes the first offer in the door, however, and is overly eager to get the deal done, they might miss out on a better price and a more qualified buyer.

“The delayed seller’s review is an excellent strategy but several other key factors must be in place to set the perfect storm,” Kennedy said. “You need low inventory, competitive list price, good location and turn-key condition. If all of these stars are aligned, then selling brokers can use the time period before the review of offers to prepare their clients for the bidding process.”

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