How long can a seller take to respond to your offer? If you don’t impose a time limit, they have as long as they want. Of course, if they drag it out, you can withdraw your offer at any time before it is accepted.
Just the prospect of being at the mercy of the seller’s timing, begs the question “Should I put a time limit on my offer?” It depends.
It can be a good idea if…
…you have limited time to shop for and secure a property. For example, you may be moving to a new town and you can afford (time and/or money wise) to be there for only a few days to shop for a new home. This happens frequently when people move their families to take a job in another city. You can’t wait a few days for a seller to respond. You must know whether or not the deal with work out so you can move on to another option if it does not.
…you are making an offer that includes both a very attractive and an unattractive factor for the seller. Many times, especially under the pressure of a deadline, a seller will take an offer that’s not perfect if it addresses his MOST important pain point. For instance, let’s say you know the seller needs to leave or get the money from the sale of his house as soon as possible. If you can make him an offer to close and get him his cash within two weeks, he may agree to a less attractive price. Now, that may have been the case without the deadline of the offer. However, if the seller worries they may not get another offer that solves their number one problem, the time limit may increase the odds of the person saying yes even though the price or other terms are less than ideal.
…you’re buying in a hot market and you want to lock down the deal. Imposing a deadline can be effective if you are making a strong enough offer that the seller questions whether she may get another one as strong as yours if she waits.
Imposing a deadline on your offer may not be such a great idea if:
…you really love the house, yet the terms of your offer are weak. A savvy seller or seller’s agent will let the deadline pass to see what you will do. If you walk away, they don’t care because the seller wasn’t going to sell under those terms anyway. However, if you love the house so much that you’ll re-submit your offer after the deadline you imposed passes, you will have “shown your hand.” It will be clear you have a high interest in the house and you will have lost most of your negotiating power.
In any case, always check with the listing agent to confirm the seller is available to review and respond to the offer before submitting an offer with a time limit.
Otherwise, you run the risk of the listing agent saying, “Thank you for the offer, but the seller is out of town and doesn’t have internet or phone service, so I won’t be able to reach her for at least a couple days.”
If you’ve already submitted the offer without knowing this piece of info, then what? Do you withdraw the offer? Probably not, since presumably, you really want the house. So, now the seller and her agent know that you really want the house, which reduces your negotiation power.
As you can see, clauses that automatically withdraw your offer if the seller doesn’t respond by a certain date, can be quite useful, but they can also backfire and work against you. When evaluating whether or not to use one, the best advice is to anticipate the seller’s possible reactions and responses and to consider what your next move will be in each case.