Your real estate agent has shown you a great home before the official open house. It's the right style, in the perfect neighborhood, and you love it. Should you seize the day and make an offer before the home is added to the list of Minnetonka homes for sale or Alexandria homes for sale? In most real estate transactions, offers come in after a house debuts on the market, and potential buyers get a chance to look at it. Some sellers will even set an "offer date" to expose the home to as many buyers as possible and get multiple offers. In some cases, however, submitting an early offer may be the best course of action.

What is an Early Offer, and When Should You Consider It?

An early offer is a bid made by a buyer on a property before it is listed on the Multiple Listing Service(MLS) or before the seller's official offer date. An early offer is a great way for buyers to get noticed before other buyers fall in love with the home at the Open House. Once the property hits the market, the seller or their agent will market the home to the best of their abilities. They'll promote the home online, schedule an open house, and set up multiple showings. These marketing efforts will attract multiple offers from different buyers.

In today's hyper-competitive markets, where the demand for houses is high, but the supply is low, making an early offer can help you get a leg up on competitors.  It's a great strategy if you've undergone a bidding war and your offers were rejected at least once or twice. It can increase the odds of getting the house you want. The goal is to submit an offer that will convince the seller that they'll not get another better offer than yours. This means it should be mighty attractive and hard to refuse.

Pros and Cons of Early Offers

• Pro #1: Bid Without Competition
  After getting beat out on a few previous homes or finding that home the checks all the boxes on your must-have list, an early offer might be the aggressive strategy you need to make to get your bid noticed ahead of other potential buyers. If your offer is solid and sufficiently high, the seller may be happy to accept it, and you get to avoid competition.
  
  
• Pro #2: Learn About the Seller
  Your agent might ask the seller about what they want in terms of prices and conditions for the sale. If things are agreeable, you may get the home with no competition. And even if your offer gets rejected, learning about the seller's motivation can allow you to make a better offer that accommodates their needs.
  
  
• Con #1: You Could Overpay
  If your early offer is accepted, you may never know just how much you overpaid. Like, would you have been able to get the house for a lower price if you waited for the offer date? You may never know. And if the seller had not completed all the inspections and disclosures at the time of your offer, you'll be making a bid with little or partial information about the house. More problems may be discovered later, and you may be forced to pay thousands of dollars to have them fixed, especially if you waive the inspection contingency.
  
  
• Con #2: Your Offer May be Shopped Around
  While this is unethical, a listing agent may use your preemptive offer as leverage for other buyers to submit higher offers. They could discuss details of your offer with other buyers or buyer agents, thereby creating a bidding war. You may even find someone submitting an all-cash offer for roughly the same price you offered.

Whether or not your early offer is accepted is out of your hands. The seller might accept your offer if it's extremely strong or reject it if they feel that they might be able to get a better offer. Because of the complicated nature of early offers, it's best to work with an experienced real estate agent who has a deep understanding of the market. Our team at Counselor Realty can help you navigate through this important decision and help you write a winning offer. Call today to learn more.