What I learned About Writing Real Estate Contracts From Gumby!
You may wonder how playing with a rubber Gumby toy relates to real estate contract negotiations. In one word….Flexibility! When a buyer writes an offer on a home with multiple offers, the flexibility of the terms that the buyer can offer can have a profound affect on the seller’s final decision. The more flexible, the better the shot at getting the home…Go Pokey!
Make it as easy as possible, given your needs, for the seller to accept your offer. Find out as much information possible about the seller’s needs and how the offers will be presented by asking the seller’s agent. This is just plain common sense, but you would be surprised how many agents don’t take the time to talk to the seller’s agent. Examples of content related questions include: Does the seller want a quick or long close? Do they need a rent back? If so, for how long? Note: check with your lender to determine the length of rent back the lender will allow. Is the seller willing to allow you to have further inspections. Is the agent? Don’t be surprised if the agent recommends that his/her seller reject offers that request further inspections. This is short sighted advise, but it happens. I’ll address this topic in a later blog. If the seller is comfortable with allowing further inspections, is it likely that the other buyers will be waiving this right (ask).
Some questions pertaining to the offer presentation could be: How many confirmed offers does the agent have in hand? FYI, some of these may turn out to be phantom offers. How many disclosures have been reviewed (since most agents put their clients disclosures online, this number is easily identified but can get lost in translation). Will the listing agent and/or his/her office be writing an offer on this property? If so, how will it be handled? Will the seller entertain sharp bids or relative offers? Back in 2000 these were very popular, but some questioned their legality and they became out of fashion. We are seeing a little resurgance in these types of offers recently. Lastly, and this is where experience really helps, what is the reputation of the listing agent? In short, if the agent is unethical, its likely your not going to get the house. This is a touchy subject but you can probably find in every real estate company, agents who live on the ethics edge. Most are good, but some cross those boundaries. And given a reduction in the overall number of homes sold this year, the climate is ripe for an increase in unethical behavior.
Lastly, and ending on a positive note, when your offer is presented, make sure you include all of the signed disclosures (including your agent’s due diligence inspection) that the seller has provided. This shows your serious intent on purchasing the home and will be appreciated by both the seller and his/her agent. It also increases the comfort level of the seller because in the seller’s eyes, you have reduced the odds of legally backing out of the contract.
Good luck!
