What is a “blind offer” in real estate? Episode #303
Hello. Welcome to Todd Miller TV. The subjects today are blind offers. So what a blind offer is it’s an offer on a piece of real estate where the buyer hasn’t actually been to the property. They haven’t seen the property. So you’re probably saying, “Well, why would somebody do that?” Well, there are a few reasons. And I’ll sort of go through them. OK.
So in a normal market, the average time of the market for a home is about six months. So what typically happens is when you go to look at properties, you’ll see that there are – everything is on the market. It’s all good. And you’ve got to look at houses then you got to pick the one you want and you got to make an offer on it and then counter back and forth and the offer gets accepted. You have plenty of time.
So, that’s a normal market. That’s how I would say traditionally has been. But – so right now in many markets especially here in Las Vegas real estate market, we have a scenario where a house is puts on the market, within a couple of days, it got a whole bunch of offers then it disappears. It’s under contract. So by the time you find out about it, your agent finds out about it, you go to the house, you look at the property, you set an offer, it’s either already under contract or you’re competing with people.
So what we’ve seen is that people are submitting a blind offer. And this is how we know. We’ll put a house on the market. Put it in the MLS at like 10AM. Well that night, we’re getting offers on it. And I don’t think that people have jumped in their car and driven over the house.
So, I’ll give you an example. I had a house that sold just recently where we got two offers the first day but the seller told me that there hadn’t been any offers yet or there hadn’t been any people come into the house yet. So I’m like, “How can there were two offers when no one has been to the house?” Well, they were low, little low in cash offers because what they were doing is that just everything that comes on the market, they low ball for cash and hope they get it and then later they go look at it.
So there’s a couple – I’m going to give you the advantages and disadvantages of blind offers. OK. An advantage of a blind offer is you get your offer out there fast, OK? That’s one advantage. That’s really the only advantage. I mean you’re pricing, what if they accept it and then what if you get the house you don’t like? Well, that’s what due diligence is for. If they get to the house and this is what they do. They write the offer. It gets accepted. They go, “Yay!” They show up at the house a couple days later and they look and they go, “Oh, we don’t like it.” So then what happens is they go, “We went over there and did due diligence. We’re going to cancel it.” OK. So that’s the advantage.
Here’s the disadvantage. The disadvantage is your offer is likely not to be considered or accepted and this is why. A lot of times, what we do is we check the lockbox code because we want to see who’s showing the house. And if we see that you’re sending in an offer but you never showed the house, you were never there, we’ll let our seller know that, “Hey, we don’t have any proof they were there at the house.”
The other thing is we’ll call the agent and ask, “Have you – has your client been inside the house?” Now, the agent is not supposed to lie. They are supposed to tell the truth. They can’t go, “Yeah, sure. They were there.” So if we know that they’ve never been in the house, the seller is going to use that information. Because the seller doesn’t want to accept their offer then have them show up a couple of days later and say, “Oh, we don’t like it. Cancel.”
That happens most of the time. I mean it’s very rare that someone writes the offer, it’s accepted then they go look the house and they go ahead and go through with it. The people that are doing this are doing this on lots of the houses. And for sellers, it’s just not a good strategy to accept those offers. That’s sort of been our experience.
So, is it something that has to be disclosed when you write your offer that you’re submitting it without – that it’s a blind offer? Nope. As a buyer, you don’t have to say, “I’m submitting the offer. Site unseen.” You don’t have to do any of that.
I’m just saying, it’s probably the most important of your due diligence is physically get in the house and see it and look around. Just because you saw the pictures on the MLS, a lot of agents don’t take enough pictures and you won’t know everything about the house until you’re actually in it. The other thing that MLS pictures won’t tell you are smells and things like that. So, it’s very important to see the house.
So anyway, that’s sort of my advice for writing blind offers on real estate properties. Personally, I don’t think it’s such a good idea for sellers to accept those offers. There are some advantages though for buyers.
Anyway, that’s my update and hope to see you on another video. Thanks.