In today’s seller market where homes which are priced to sell are often receiving multiple offers, buyers will want to be sure to take the necessary steps to craft a solid offer. Working with a buyer agent who is a Realtor helps to ensure that you are using a comprehensive and updated Purchase & Sale Agreement and Addendums. Depending on the situation such as a newly constructed or a bank owned home, additional Agreements may have to supersede your offer.
The anatomy of the typical offer includes the Purchase & Sale Agreement, a letter of pre-qualification or pre-approval from your lender, a copy of a check for the amount of the earnest money deposit made payable to the escrow agent, and any accompanying attachments initialed by the buyer in acceptance such as the deed, tax map, seller’s property disclosures or other. If you choose to send only the Purchase & Sale Agreement with none of the necessary accompanying documents of your offer, you risk the seller not taking your offer seriously by sending a message of indifference of outcome. It is important that you get off on the right foot by sending all components and ask your buyer agent to present the offer to the listing agent by calling to review the offer together or delivering (do not assume that all agents will do this without being asked to do so).
It is not uncommon for comparable sales and other market data used to determine your offering price to be included and reviewed by your agent with the seller’s agent to help the seller better understand how you arrived at that number. You may also wish to include a personal letter you have written to the seller to set yourself apart from any competing offers and illustrate yourself as a person, not a contract. Having all of the attachments for the seller to review prior to making a decision on how to proceed is one step to building a strong offer, the next is the price, terms and conditions you set forward.
Removing as many contingencies and keeping your offer “as clean as possible” is a great way to make your offer more attractive. Your type of loan or financing may dictate certain terms such as the amount of required seller paid closing costs will be necessary, or how long it will take to be able to close on the property. These seller concessions may be offset by increasing the purchase price, if the property will appraise for the greater amount, or making a larger earnest money deposit in the event you are competing with cash offers providing a quick sale. Ask your lender and Realtor what inspections you will be required to ask the seller to allow you to hold and include any additional investigations you wish to make your offer contingent upon. Keep the timeframe for these contingencies as short as possible which may depend largely on the availability of others. Having another house to sell can be a difficult contingency for sellers to work with, so you may want to consider offering more than the asking price.
Your offering price should reflect various factors including the number of days on the market, interest and activity, availability in that neighborhood or area, the seller’s motivation for selling as well as your own urgency to move or desire to get the house. Review comparable sales with your Realtor to help determine a reasonable offer to achieve the desired outcome. Be sure to compare what the seller’s actual net proceeds are to your offering price and to consider what the seller’s most likely reaction will be to your price. If your offer is conditional upon obtaining financing, the property will most likely have to appraise for the agreed purchase price as a requirement of the loan, so over paying is less of a concern.
After your offer is presented and you are waiting to either hear back or not hear back from the seller, the minutes and hours following often seem like an eternity. As eager as you are for a prompt response, it is wise to allow ample time for the listing agent to present and discuss your offer. When it’s all said and done you will have, hopefully, taken all of the steps one can, but now the ball is ultimately in the seller’s court. Be sure to discuss this exciting and often fast paced process in advance with your Realtor so when you are ready to make a move you know what to expect.
Nicole Foster is a real estate broker/ Realtor of over ten years with Regency Realty based in South Portland. She lives in Windham with her husband who is a local builder and their four children. Learn more about Nicole at nicolefoster.mainelistings.com.