Pre-emptive offers can be risky for everyone

Inman News has an article by Diane Hymer on the pitfalls of writing and/or accepting pre-emptive offers on real estate transactions.

IMHO, the best strategy is to let the market decide what the house is worth... Run the property through the proper paces of open houses, aggressive, wide-spread marketing, and give everyone a couple of weeks to see it and make a decision about value. If you have priced the property well, the market will determine what the house is worth.

This doesn't account, however, for unrealistic expectations. If you have done proper marketing (a good, local agent, placement in every possible media outlet, mailers, showings, etc), you will know that you have gotten the best price the market will bear for your house in the current market, even if it's not a higher price than your neighbor just received.

There are always limited exceptions to every rule, but most houses sold in pre-emptive situations would have sold at or above their final price had they been through the paces and when everyone had an equal shot at presenting their offer.

One thing that she doesn't mention in this article, however, is the pitfall of accepting a single pre-emptive offer and finding out that the buyer is going to back out. If you have received two or more offers, you will likely have a good, strong back-up offer to bring to to the table and complete the transaction. If your single, pre-emptive offer goes away, you're back to square one and your property will likely be viewed as 'damaged goods', even if the initial buyer just changed their mind (irrespective of the quality of the property).

If you're the buyer, how badly do you really want THIS property? Are you willing to overpay to make sure you get it? If not, wait for the offer date and gauge the interest level at that time. You might find that there's not as much hype as the seller/agent implied there would be. The best tactic is to look at actual value, regardless of list price. If you know the comparable sales for this type of property, and this one is priced at or near the actual value, there's a good chance they won't get the multiple offers that other properties have received.