On How to Write a Winning Offer
At one point, you will find the one – your next home!!! You may be thinking to yourself: now what?
Well, it’s time to write:
Even if an offer is just a placeholder until you cobble its components together, there is a premium for being first. For example, if you’re in contract on a property and someone else comes along with a higher price, so long as we are performing under the terms of the Purchase Contract, then the property is still yours in most cases. In a competitive situation for a ‘hot’ property, consider it a race to ratification.
There is no exact right or wrong way to make an offer. Real Estate transactions are as individual as people are; no two transactions are exactly alike. That said, there are basic guidelines I use in writing an offer: clarity and confidence.
So, once we have found the home you want to buy, we will review it and compare it relative to your goals and current market conditions to determine the value and what price you should offer. There are many variables that help define what the offer price should be and I will explain these to you.
Once you have decided the initial offer price I will draft the offer materials and review with you all of the financing options, inspections and contingencies that are part of your offering. Even though it’s a form contract, there are a variety of options that can change your offer’s appeal and likelihood of acceptance significantly such as contingencies, escrow duration and down payment amounts.
And a practice note:
Most offers are done via email, sometimes fax and more commonly via e-signatures. The service we use at Vanguard is DocuSign, which allows for electronic signatures on just about everything, but there are times where you still have to sign the old fashion way with ink and all: this is true for title documents and certain lenders have requirements for ink signatures for purchase documents.
So, what do we include in an Offer Package?
A cover letter (where we get to tell the seller the salient terms of the offer and a biographical sketch) written by me (with your help).
Personally or e-signed (via DocuSign) versions of:
< The Agency Disclosure agreement (this spells out who represents whom)
< The Main Purchase Offer Contract (a form document yes, but one with very powerful alternatives and flexibility)
< Addenda, if any (these could be standard form ones like the TIC Addendum, a Trust Sale Addendum, or customized reflecting our specific situation)
< Your Financing Information (either a lender’s Pre-Approval Letter or Proof of Funds)
< A Copy of your Deposit Check (sometimes called earnest money) this is usually 3 percent of the purchase price. The Payee is the escrow company or, simply, “Escrow Company,” and if the Offer is accepted, the escrow company will send a courier to collect your deposit check within hours of acceptance.
What Happens Next?
The seller can Accept (i.e., we’re ‘ratified’), Reject (why would they do this?), or Counter (either individually to us, or to many others if there are multiple offers with each being potentially different).
Potentially, we may assume a backup position. This means if Buyer A who ‘won’ the first bidding process fails to perform then instead of going back to the open market, the Seller then immediately proceeds to the backup offers and designates which will be elevated (provided buyers agree and/or haven’t left already. If Buyer B was awarded the first backup position they’d go next and so on…