Offer Expiration Date
By Jim Palmer Jr.

In this hyper real estate market it is not unusual for a listing broker to receive multiple offers on listed properties within hours of the listing hitting the MLS data base. On properties in certain price ranges, the lack of inventory is causing a shark feeding frenzy with buyers who offer more than the listed price so they can compete against other eager buyers.

One strategy naïve buyer’s broker’s use in these scenarios is to put a short expiration date on their offer, with the expectation that the seller will be rushed into making a decision on their offer. Using similar logic, some buyers erroneously believe that the seller is legally or ethically obligated to deal with offers that came in first or that have a short expiration date, ignoring other offers until they have completed negotiations with buyers in order of receipt. That logic is far from the truth or real life in real estate.

For starters, the listing broker has no legal, ethical or moral obligation to put any offer above or in front of another especially because of a short expiration date. Their legal obligation is to represent the interests of the seller in collecting as many viable offers as possible. The listing broker does have a legal obligation to present all written offers in a timely fashion and to be honest with all parties whether they represent them or not, but when the seller receives offers, they have no obligation to respond right away. They can take enough time to look at all presented offers, even though stalling a buyer past an expiration date may result in losing them if they have no stomach for the ensuing bidding war.

In the instance where there is one offer on the table and there is an expectation of other offers coming soon, the seller can stall any consideration of the offer until they have seen a second or third or more offers. A logical person can see that accelerating an expiration date can hurt the buyer in that case. A seller may not want to give an expired offer any consideration. Rushing the seller may not accomplish the intended purpose. A better strategy would be to write an offer that gives the seller time to make an informed decision and one that can compete in that environment.