When writing an offer you should think of it as presenting evidence in a court of law. If you were to try to prove something in a court of law you would make sure and have supporting documents to back up your claims. It is not different when writing an offer in today’s competitive real estate market. Would you go to court without proper evidence to support your claims? Negotiating with sellers and listing agents can be very troublesome for most agents because they do not take the time to properly explain the process to their sellers. Check out my blog showing the overview of the offer process here.
Knowing the ins and outs of writing a strong offer goes a long way towards facilitating a sale, especially in a market where multiple offers are the norm. Writing the offer the way the seller wants to see it the first time not only save time but often times ensures the deal will be accepted.
Here are some basic tips to use when writing an offer, they all make the assumption that the listing price and the offer price are both realistic.
Proof of Funds – Pre-Qualification Letters:
The biggest reason offers cannot be considered by sellers is that they are missing the POF, (proof of funds) or pre-qualification letters. Proof of funds or pre-qualification letters must be dated within the last 30 days, show the full purchase amount, have the same name as stated on the contract, and be in English & USD!
Escrow deposits show buyer interest. $1,000 minimum initial deposit for any offer, the more the EMD the more the seller will want to approve! If the buyer is getting a loan, buyers should be willing to put in escrow at least what they plan on putting down on the loan. For cash you should include a minimum of 10% of the offer price.
Closing Dates should be no more than 21 days for cash offers, 30 days for conventional and 45 days for VA&FHA offers. The quicker the close date the more the seller will want to approve!
Time for Acceptance:
Time for acceptance is important, make sure you give enough time for the seller to review the offer, but not too much time where they will receive other offers in the process of considering yours.
Keep inspection days as low as possible, but allow enough time to coordinate the home inspection. Sellers want to be able to put their properties back on the market sooner than later should the inspection not work out. For cash, keep it between 5-7 days. For Conventional financing at least 7, but no more than 10 days. For FHA and VA at least 10, but no more than 15 days. The fewer inspection days the more the seller will want to approve!
As Is Contract Offers:
If writing the offer on an “As Is” contract do not have any special clauses on repairs, appliances, or other special requests. Remember they want the buyer to take the property “As Is”!
Always include Articles of Incorporation if contract is in company name. The sellers want to know that the person who is signing the offer has the authority to do so. The title company will need this later anyway.
Never make residential contracts assignable. The only reason a contract should be assignable is in a commercial setting where the buyer may be creating a new entity at closing to take title to the property for accounting or liability purposes. *Broker Tip* Include FICO score with any VA or FHA offers (make sure you have the buyers permission in writing).