The offer isn’t the end of the selling process. Rather, its the beginning.
Maybe you have one offer on the table, maybe you have multiple. Whatever the case, there’s a decision to make. Do I work with what I have on the table? Or do I wait for a better opportunity.
This is where Qualified Buyer Selection can help. The best offer isn’t always the one with the highest price. Many factors can come into play. ReaLawState’s process of Qualified Buyer Selection can assist you in your next Real Estate Transaction to avoid a problem with the opposite party before it begins.
By comparing the offer against a pre-determined list of questions, you can not only increase the chances of a smooth closing, but potentially eliminate offers coming from insincere parties.
An Offer Is More than the Price.
Some important factors (other than price) when considering an offer are:
- Closing Date
- Requisition Date
- Terms of the Offer
- Buyer Credibility
Deposit can play a big factor when determining the sincerity of an offer on a property. The Deposit amount should always be less than any down payment (as some first-time home buyers might not have all the cash available on offer night), but enough to incentivize the buyer to complete the transaction.
Failure to complete a transaction by the buyer typically can lead to forfeiture of deposit.
ReaLawState recommends a minimum deposit amount of 5% of the purchase price. Anything less than this amount could signal that the buyer might not be serious in purchasing your home, or might not be able to afford it.
Work With Us and Experience the
Looking to Buy or Sell your next property? Work with ReaLawState Realty Brokerage and get the experience and confidence you deserve in todays competitive Real Estate Market.
The best part? Legal Fees are covered in commissions already paid.
The closing date is another aspect of an offer that could affect the apparent validity of an offer. Buyers that offer long closing dates might be doing so in a hope to either flip the property, give themselves enough time to find the funds to purchase the property, or tie it down until the end of the hot market, and threaten not to close unless you abate the price.
All three of these scenarios should never be made the sellers problem.
It’s also important not to be rushed from your home. Movers can require 30-45 days of notice and a situation in which you are unable to give vacant possession could be a nightmare for a first-time seller.
ReaLawState recommends a closing date of 30-60 days from acceptance of the offer (or fulfillment of conditions) in most common residential transactions.
The Requisition Date is a topic we have covered before on our blog. It is typically the date in which the Lawyer must raise any objections to title that could prevent the transaction from closing. A requisition date extremely close to the closing date could signal that the buyer
A general Rule of thumb for the chosen requisition date is the earlier OF:
5 days prior to closing
30 days following acceptance or, fulfillment/waiver of conditions.
An offer with a higher price and loaded with conditions can be seen as less attractive than a lower, “firm” offer. While the buyer should be allowed some time to perform due-diligence on the property, its important to find a happy medium between thorough inspection and looking for issues.
Timing plays a critical role here as well. In a multiple offer-scenario, a long condition period might be used as a tactic to ensure any other offerors have moved on from the property. The result is acceptance of a price abatement or other proposed terms, or the buyer walks and the seller is left with a property colder than ice.
ReaLawState recommends conditional periods not exceeding 5 business days for most residential transactions, and 10 business days for most commercial transactions.
Terms of the Offer
Offers with extensive terms, representations, or warranties can expose the seller to an unnecessary amount of risk in a real estate transaction. It’s important to understand what reliances are being made by the seller at the time of sale. The seller should consult with their agent or Lawyer prior to acceptance of the offer to ensure there is nothing egregious being agreed to, perhaps even unknowingly.
It’s important to note that it is both illegal and wrong to discriminate buyers due to age, sex, race, marital Status, or any personal aspect of one’s life. In no way should these factors play a role in determining whether or not to work with an offer.
However, buyer credibility can play a huge role in determining if you will be left with an issue prior to closing. Investigation into the buyer’s prior real estate experience, means of institutional leverage, track-record, and overall demeanor can be key indicators when reviewing an offer.
ReaLawState can assist you with this investigation, including asking the right questions to the buyer or the buyer’s agent, and seeing if the individual can pass the “sniff test”.
How ReaLawState Makes the Process Different
Traditionally, an agent would be tasked with assisting their client in determining if an offer is valid. Some agents may do this poorly, or provide no assistance at all. By the time the issue arises, even with legal assistance, it can be too late.
However at ReaLawState, clients are paired with both a licensed Real Estate Representative and a Lawyer before any contract is entered into. This revolutionary idea not only prevents nightmare-scenarios like those listed above, but can assist you with achieving your real estate, financial, and personal goals. Clients can rest assured that an experienced legal professional and seasoned agent are both looking out for their best interests throughout the transactional process.
The best part of this exclusive partnership in representations is that is occurs at no additional cost to the client. Lawyers are paid contingent on closing the transaction from the same commission already owed to the agent.
Are you ready for a redefined Real Estate Experience? Contact Us for your free, no-obligation consultation today.