If you’re in the market for a new home or you’ve purchased a home in the Boston area over the past 10 years, you’ve almost certainly come across the phrases “Offers due by”, “Call for offers” or “Offer Deadline”. It’s so commonplace that most just expect there to be a deadline the moment a property hits the market.

I wanted to look at the history of offer deadlines and see if there was any correlative market data to tell the story.

10+ years ago, this wasn’t the case. Offer deadlines were few and far between. Properties were sitting on the market for longer. There wasn’t a crush of buyers at every open house throwing fistfuls of cash at the listing agents. As with any well-marketed, desirable, effectively priced listing, it still happened sometimes. But even then brokers would usually wait until they either began receiving offers or they knew for a fact that they were getting offers before making the big announcement. Nowadays, it seems, agents include an offer deadline in the listing ad copy before they even put the listing online.

First of all, are offer deadlines even helpful? The answer is definitely YES if the market is regularly producing listings with multiple offers. It helps a broker keep order. It helps keep the playing field level and distills the interest into the purest and strongest offers. Now, if the listing agent hasn’t ‘read the room’ or priced the listing too high, an offer deadline can be a deterrent by scaring buyers away who think, by seeing the very words “offer deadline”, that it’s guaranteed to lead to a bidding war.

When did it start? And why the sudden prevalence? Are offer deadlines just going to be part of the local real estate landscape forever more? Is there a better way?

Let’s look back a few years, shall we?

A Brief History of the “Offer Deadline”

“The first offer is usually the best offer” The good ole’ days.

When I began my professional real estate career in 2005, I remember regularly hearing that the ‘best offers would come in first.’ The thinking was that the strongest, most interested buyers were the most aggressive. Makes sense. In those days, properties averaged almost 40 days from list date until an accepted offer. It also took longer to market and get the word out. New listings didn’t ping your smartphone or smartwatch the second they became available like today. No, the local newspaper’s real estate classified section was still the predominant source for open house times and listing information. Even into the 2010’s real estate information lagged from MLS by days sometimes if you were using a secondary site and any of those sites that offered MLS information weren’t pretty or efficient.

Nonetheless, at the first available moment to view a property the most aggressive, most active buyers were front and center waiting to get in. It wasn’t unusual for us to have blank offers in the trunk of our cars in case a client wanted to make an offer then and there, on the hood of the car. Good listing agents would take your offer and get on the horn to generate more interest and shop for more offers. Bad agents would consider an offer at list price or slightly better as job well done and lock the door.

It wasn’t unusual for us to have blank offers in the trunk

The bloated and slow moving real estate market that was common between 2007 and 2011 is unrecognizable in contrast to today’s anemic inventory and ultra-fast paced market. But then, between 2012 and 2014 some things changed and it felt like the market changed overnight. What happened? Let’s look specifically at the JP market though the interest rates are reflective of what was happening nationally.

First the interest rates began a precipitous decline. Between 2008 and 2011, the rate plummeted over 2 points. For the first time in over 50 years (and maybe ever, but I don’t have any data from before 1970), the rate dropped below 4%. Whatever inventory was on the market—including a lot of that shadow inventory remaining from the foreclosure crisis—was swept up.

Between 2010 and 2011 the landscape really began to change. The low rates really brought the housing market back to life and, then between 2010 and 2012 the inventory dried up like the Rio Grande. With no properties and interest rates lower still, competition grew fierce. These were the perfect conditions to raise demand through the roof. Also, technology was changing too.

Coincidentally, the IDX capabilities allowed for buyers to see new listings MUCH faster than before. Now buyers were seeing properties as they hit the market in real-time and making showing requests immediately. This amplified the market pressure.

It only made sense that agents, who were getting run over by droves of aggressive buyers and agents, began to tamp down on early access. The “offer deadline” became a necessity.

This chart below actually shows this happening. We took all the single family and condo sales records from MLS in JP beginning in 2007 and through March of 2022. I searched for instances of expressions like “offers due by” or “seller to review” in all the commentary sections of MLS (i.e. property description, firm remarks, showing instructions, and disclosures). Between 2012 and 2013 the rate of incidences jumped from 19% to 33%. And since 2015 it’s never been less than 50% (until the first 3 months of 2022).

More indications of a big change since then could be seen in two other metrics that we use to gauge the strength of the market: Days to offer and list-to-sale price. Again in 2011 you can see (in the chart below) a precipitous drop in days to offer (from over 60 in 2011 to less than 20 in 2014. Simultaneously, the sale-price-to-list-price ratio, which had been holding at around 98% for many, many years jumped from 97.7% in 2011 to 101.8% in 2013.

The 2014 real estate market in Jamaica Plain (and almost everywhere else in and around Greater Boston) was unrecognizable from 2011 in every aspect.

What’s the Best Approach to Handling Offer Deadlines?

So what to do? Will it ever change? Are deadlines just part of the landscape now? Can you ignore a deadline if you’re a buyer? Is there any advantage? What if you’re listing your home for sale, does it always make sense to impose a deadline? When does it make sense to “take offers as they come” in lieu of waiting through the weekend?

Generally speaking it’s not always easy to gauge.

For buyers, it sometimes actually can make sense to offer in advance of a deadline. Make sure you and your buyer agent can read the room to see if this makes sense. Does the listing agent have a history of abandoning deadlines? Are they always unwavering? How communicative will they be? Will agent take your offer and use it to fetch more?

If you’re the seller you have to ask yourself if other comparable properties are getting multiple offers already? Is yours priced to get attention such that buyers come running from the hills? Or are you pricing at the top of your property’s market value?

There is no singular approach that will always result in a positive outcome. That’s why it’s so important to read the room.

But here are a few things you should know about offer deadlines:

1. Sellers are under no obligation to wait until after their deadline to accept an offer. For those of us who are Realtors, we have a duty, per our Code of Ethics, to present any and all offers to our sellers as quickly as possible. Whether or not it makes sense to try to submit an offer (with the intention of getting an acceptance well in advance of the deadline) early, is really case specific. A good buyer agent is someone who knows when to be aggressive and when to hold back.

2. FOR SELLERS: It’s generally our practice to withhold any written mention of an offer deadline until or unless I know for sure we can anticipate multiple offers. Also, not publishing the deadline forces interested parties to contact us for fear that we’ll take the first offer. It shows us, the listing team, who’s really interested in our listing. It winds up a being a bit more work for us, but it gives us a little more intel on the interest level. When brokers immediately put an offer deadline in their listing, there will be a sizable percentage of agents and buyers who will think to themselves, “we’ll see it over the weekend and, if we’re interested, we’ll reach out to the agent before their Tuesday morning deadline.” What if an aggressive buyer or agent fails to honor the deadline and makes a “showstopper” offer on Friday night before the weekend? The listing agent—who should, at that moment, be on the phone alerting every interested party of the freshly received offer—won’t even know who to call because most folks were waiting until after the weekend. The takeaway for sellers, though, is that it’s generally better to see the deadline through, but make sure you’re listing agent is on top of any interest in real time.

3. When an agent redundantly writes “Seller reserves the right to accept an offer before the deadline” it could be a tell. It is never not a seller’s right to accept an offer on their private real property whenever they please. But moreover, when agents include this unnecessary phrasing, they’re probably actually telling us that their sellers ARE, in fact, ready and willing to look at offers before the deadline. It’s kind of a mixed signal and usually raises my antennae. So when you see those words, proceed with caution.

4. ALWAYS make sure your agent gets on the listing agent’s radar, whether there is a deadline or not. For many there is a tendency, when they see an offer deadline, to wait until after their clients have seen the property to alert the listing that their client is interested. Some agents never even do this (pro-tip: big mistake) and just send an offer, without preamble or introduction, at the deadline. But in the event that another buyer is trying to work around the deadline by submitting a “show stopper”, the listing agent will let you know, in advance. When we are the listing agents, our team never puts a deadline in writing before the weekend. We do this with HOPE that the interested parties will reach out so we can know who they are and who to contact if someone else wants to make an offer in advance.

5. Put your best foot forward and don’t hold anything back when you submit an offer. There’s no guarantee nor obligation on the sellers’ side to have multiple rounds of bidding. One of the reasons agents would call for “best and final” was because often many of the first groups making bids weren’t aware, necessarily, that they would have competition. Then listing agents extend this courtesy to all parties. But there’s just no guarantee.

So what’s the right approach? Ask your agent for guidance towards the best outcome. A good buyer agent will know how to read the situation and put you in the best position. You may not always win, but your odds go WAY up when you add an excellent buyer agent to your team.

Don’t have an agent yet? Let’s talk. We’ve been representing buyers in these parts since 2005 and we’ve seen almost every iteration of the housing market. We love helping buyers and we’re pretty darned good at it too.

Good luck out there!