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.
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