Formality of an offer

[John Snow]

After overworking every number possible in a possible flip property, I'm ready to make an offer on a property. I'll be meeting the homeowner Monday to discuss that offer. I came across this property prior to it being listed on the market, they're planning on listing it at the end of the month, and I have no realtor involved on my end. The homeowner has a realtor that will be listing it, if it gets to that point, that she would like to have be a part of the conversation. My question is, how formal should this offer be? Documentation? I have been a contractor for the better part of the last 30 years and most of my deals were the product of a "discussion" and then we formalized it with contracts at a follow-up date. Can, should, I approach this the same way or should I be prepared other-wise? Thanks in advance!

[Jerry W.]

@John Snow in nearly every state in order for a sale of land to be binding there must be an agreement in writing. It is usually called the statute of frauds. If you are serious I would write a check when you agree on terms and either have a simple buy sale agreement ready with fill in the blank price, or pull out a tablet of paper and put the terms down and sign it. A deed must be notarized, but in most states a contract to buy land does not. You might check your state law. The main thing that must be included is the location of the property, including county and state, legal description is best, but street address might be ok. It must be signed by all owners, and buyer, or one party must have authority to bind the other owners, it must set a date for the transfer to occur, that can be on or before, and it must have the consideration.

It would be best to include matters like they must convey good title and provide title insurance, proration of taxes/rent, and what personal property stays and what goes. Add anything else you have agreed upon.

The realtor will not want them to sale to you because they will lose all or a part of their commission, and they typically say they can sell the property for more if the owner will just list with them.

Hope this helps.