Tuesday, May 29, 2007

Verbal Real Estate Offers

We want to save time by making a verbal offer but our agent recommends against it.

Your agent understands that if it isn’t in writing it is exceptionally difficult to enforce a verbal real estate agreement. In other words, if the Seller agrees to your offer and later won’t sign your written agreement there is little you can do without high risk, cost, and time … if at all. Many things can happen before a verbal agreement is memorialized … most of them bad for a Buyer. The Seller can have a change of heart, another offer can materialize, or the Seller’s Aunt Tillie can agree to give them money so they can wait for a better offer. A written offer that they sign when they are inclined to do so is an enforceable document.

If you do happen to connect on a verbal proposal, work to get a written contract as soon as is practicable for the protection of all parties. Verbal offers usually consist of price, escrow period, and maybe one or two other featured items. There are many other components to a transaction so it is important to agree on all of them quickly. If you don’t initially call out something that is out of the ordinary, there is an implication that you are going to handle the other terms and conditions in the customary manner. This is where integrity comes in – yours and that of your agent. You have given your word … what does it mean? It isn’t a time to further gouge a motivated Seller – you lost your moral chance to do so when you chose to make a verbal offer.

If you’ve selected several properties and want to make several offers looking to get the best price, have your agent write multiple offers. It is easy with computers these days, and you can have many offers working at the same time. In a Seller’s Market the Seller can contemplate multiple offers from multiple Buyers. In a Buyer’s Market the Buyer can submit multiple offers to multiple Sellers. Be aware, this situation can backfire on you. Why should a Seller accept a low offer from you if there is a chance that you won’t select their property to buy - the Seller’s low-price threshold is now known to people other than their agent. Sellers also know that if a Buyer doesn’t want their house more than another the price they receive may be less than optimum. Often Sellers, or their agents, are reluctant to compete in a multiple offer arena. Adjust your offer strategy appropriately for multiple offers so they will work effectively for you.

Our Advice: The main reason you wouldn’t put an offer in writing is because you think it too onerous to waste your time on. What do you really think of the home? How long do you plan to live in it? If you are buying it below market today and will be in it to see the market recover, why let a minor price difference keep you from the environment you really want to immerse yourself in for the next few years? Price is important, but it isn’t everything. Buy what you want, buy what you can afford, and buy with peace of mind. The best priced home doesn’t always meet this criteria.

If your offer is worthy … put it in writing. If the Seller signs it you have a deal. If it is to be your primary residence, remember what is really important to you and create that reality.

When it comes to choosing professionals to assist you with your real estate needs… Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, carsonvalleyland.com, 775-781-5472

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