The offer was made an accepted within a week of going live on the market, the home inspection happened the next weekend, and now you’re 3 weeks in and still contracts have not been signed. In fact, maybe you cannot even send contracts out because the buyer is insisting on waiting for results to come back from ancillary inspections. You have offered to make the contract contingent upon these results, but the buyers’ attorney has advised that they do not sign anything until all test results are in. Fewer buyers want to see your house now that your agent broadcast that it has an accepted offer, and the present buyer has you by the balls. You become like a desperate person who went on a date with someone they dig and hasn’t heard from them in a while. It’s not a good look for any seller, and is entirely unnecessary in this, a sellers’ market.
Our local MLS requests that verbal accepted offers be noted by your agent in the Agent Remarks section of any listing, and your agent, therefore, feels obliged to do so. And it’s the right thing to do… initially, and as long as the buyer is acting in good faith. Remarking that there is an accepted offer is not entirely fair to the seller. No offer is binding until contracts are signed, and the buyer can walk at any point before then. And it can take weeks to get that contract signed, causing you lost sleep, aggravation and grey hair. When you write “accepted offer” in the remarks, you are potentially discouraging other buyers from viewing the property. After all, who wants to waste their time seeing a property that is spoken for? It’s a turn off. It’s like going to a bar and seeing the hottie across the way, and then looking down at the engagement ring on her hand. You probably wouldn’t waste your time, right? But you are not engaged, that’s the thing. The accepted offer in our market is really an acceptable offer. It is not truly accepted until both parties have signed that contract. There is nothing to stop you from engaging another buyer, just as there is anything to stop a buyer from walking away.
Each day that the contract goes unsigned, the chances of the deal falling through increase. It costs nothing to make an offer and as a result, many buyers are trigger happy. They can make offers all day long. Sometimes buyers have offers on more than one property at the same time, even perform multiple home inspections, and later decide what they want. Therefore, noting the accepted offer in the agent remarks is a very generous courtesy, and should be reserved only for those buyers moving at a respectable and earnest pace. But that note needs to have an expiry, and that expiry needs to be communicated to the buy side, so that expectations are set accordingly. A buyer needs to be told upfront that you are willing to note “accepted offer” for a period of x days before it will be removed, depending on what you decide is reasonable in your market. A week, in my opinion, is reasonable (especially for towns south of I-287), 2 weeks is very reasonable for most other towns. Longer than that without signed contracts is, in my opinion, unacceptable. If your agent communicates this deadline upfront and is met with any resistance, he/she can simply remind the other party that every day your home remains active on the market is money out of your pocket.
A new home that hits the market garners the most momentum and interest in the first 14 days, after that, interest and showing activity trails off, and after 30 days, in this red hot market with low inventory and high buyer demand, it is considered a stale listing. A well priced home is expected to move to contract within a month or so. When it’s not, many buyers start to question it, and that’s when you start to get low ball offers from buyers who like your house but don’t want to pay full price, and have been lurking in the wings waiting to pounce when you hit the 31 day mark and might be more desperate. Being on the market too long is definitely a stigma that is difficult to overcome if you want your full asking price, or anything reasonably close to it. Buyers will view your property with much more scrutiny than they did when you first were listed, and through the mindset that your home has been passed over by dozens of buyers before them. They will seek out issues and you will begin to get ridiculous negative feedback that you never got in the beginning, like “the buyers felt the roof was too pitched” or “the kitchen island is too close to the counter.” Huh? It’s very annoying, and it is for this reason that hanging onto a flaky buyer because you are afraid to make an ultimatum can cost you in the end. If the deadline you set turns them off, then it’s most likely that they had no intentions of meeting it anyway. It will be less costly in the long run to find this out sooner rather than later. How expensive is time on market? In my experience, in Westchester county, a house that has been on the market for 30 days will cost the seller at least $10k off the asking price. 60 days on market and it is around $25k.
Many sellers fear they will turn off the buyer with an ultimatum. Please know that if this expiry is enough to turn off the buyer, as many sellers fear, then it’s better that you know upfront. Because their reaction will illustrate how truly into your house they really are. When a buyer REALLY wants a home, they will move mountains to abide by your rules. Buying a home is similar to dating, you can pretty much call the shots when someone is into you. When someone is not into you, they will look for any excuse to break up with you, and the more you chase them the more they run. Similarly, the buyers that will jump through your hoops are the ones that are true blue. The ones that are turned off by the very fair rules you set are the ones that are likely to flake on the deal anyway, and you might as well weed them out sooner rather than later. Hanging onto flakes is expensive. So do not be afraid to stand your ground and make your expectations clear out of the gate: “if you like it then you’d better put a ring on it.”
If I have not yet convinced you of the importance of being strict with that “accepted offer” label, consider this: when your agent notes in the listing that there is an accepted offer, and that offer falls through, be prepared for your agent to be grilled on why it fell through. Many worry that it was the home inspection that turned off the buyer. Some buyers are turned off in general by a home that was rejected by another buyer. So why waste this label on a buyer who is likely to flake? You see how expensive time can be. Believe me, setting a deadline is a good litmus test to weed out the time wasters. Don’t forget, in other states, buyers sign contracts immediately upon making the offer. They are committed to the purchase at the offer stage. Sellers in these states do not get the run around like they do in our market, and do not have to beg and plead with buyers to sign contracts. Neither should you.
So what’s a good rule of thumb for getting a buyer to sign quickly? Give the “accepted offer” an expiry. Give a deadline for when contracts must be executed. Make it abundantly clear that if the contract is not signed by that date, the accepted offer notation in MLS will be removed and an open house will be advertised and hosted. And make it abundantly clear that you will continue to market and show the property until contracts are signed. If a buyer is taking more than a week to sign contracts after the home inspection has been completed, nip it in the bud and remind the buyer of the Time of Essence date at which point the accepted offer will expire. If this reminder pisses off the buyer, they are commitment-phobes. If they want to be cut loose from the deal, cut them loose. Bottom line, don’t be a chump. As long as you have priced your home in line with the comps, are exposed on MLS and do not overly restrict showings, there is no reason to be desperate. There are PLENTY of fish in the sea. This is a seller’s market. Do not be afraid to call the shots, and do not waste precious time on market with buyers who fail to perform.