What is a Boston Condo Reverse Offer?
Until recently, Boston condo buyer-agents have just been telling their clients who really wanted a Boston condo to bid over the list price, so now they may need to change their tactic in advising their buyer on how to proceed in this market. When a buyer shows some interest in a condominium, the listing agent can reach out to the buyer’s agent with more than just a casual request for feedback.
The Reverse Offer is where the listing agent suggests price and terms to the buyer-agent that might be the foundation of a potential deal. It needs to be handled tactfully, and with the seller’s knowledge so it’s not a breach of fiduciary. Some call it a “reverse offer”, others use the term “preemptive offer”, or even “seller-initiated offer”. In any case, the technique is the same: the listing agent makes a suggestion or draws up an Offer that specifies terms s that the seller will accept and gives it to one or more Boston condo buyers.
It can be as casual as mentioning any needs the seller might have in their exit plan, or for terms that would be advantageous to the buyer like seller financing or rate buydowns. But it can also be as formal as issuing written offers signed by the seller for the waiting Boston for sale buyers to consider.
1) Generating attention. Reverse offers are usually made at a lower figure than list. Buyers are generally both surprised when they receive a contract from a seller, and curious about the lower number.
2) Testing the waters. The lower number included in a reverse offer is less public than a reduction published in the MLS, but gets one-on-one feedback about the seller’s terms.
3) Encouraging action. Buyers who aren’t on a definite timeframe may take their time evaluating options. A reverse offer provides a way to quickly gauge a buyer’s interest and seriousness in a home, provided the offer expires after a set period.
Yes, the reverse offer tells my clients that they’re working with a Boston condo seller who is interested in completing a transaction, as opposed to waiting for a target number. The Seller may be motivated in the sense that they need or want a transaction to complete quickly, or they may be motivated because of something about the buyer — perceived reliability, things in common, and other factors often affect how quickly a transaction can go.
A reverse offer wouldn’t be worth much if its number were the same as list and it sometimes has additional terms that are worth money, such as an agreement to help fund closing costs.
After a potential buyer views the property, the seller’s agent makes a reverse offer by contacting the buyer’s agent and offering to sell the Boston condo at a price lower than listed or with concessions that were not part of the listing.
If you’re one of the many Boston condo sellers who’s Boston condo has been on the market for over 50 days, I would encourage you to ask your listing broker about the benefits of reverse offers for Boston condo sellers.