all offers written? are verbal offers taken seriously?

Question

I think what has kept me slow on making offers is the pain in the butt long drawn out ordeal of writing it up. most the houses I offer on are on the MLS so im basically making my offer to the agent, verbal or written.

do sellers agents take verbal offers seriously? through a good discussion I feel they understand that I am an investor and am serious and that my offer has no contingencies but havent had any call backs (and im talking about 7 properties ive done this to). I make them verbally allot of the time but I wonder if it would hold more weight if I send a written offer? could I just email the agent a genaric offer letter similar to what BP forms are available, obvously it would have property specific and $ specific information on it, but I wouldnt include all the signed disclosures bla bla paperwork that goes with buying a house. would this work? it would make it much easier and I could offer on multiple properties in a much smaller amount of time. this way i wouldnt have to sit down with the sellers agent and go through the motions since my offers I anticipate will be more of a numbers game (allot of offers before one lands)

Brie Schmidt · Answer

I make all my and my clients initial offer in writing.  Then usually the counteroffer and negotiations are done verbally.  Once we have agreed on everything verbally I send over a clean contract with the stated terms for signing to make it official

Chris K. · Answer

I would question why YOU would even want to go into the transaction on a verbal offer?? Get you a simple 1-2 page contract and it will take you less than 5 minutes to fill it out. I personally wouldn't want to deal with anyone who can't take the time to write a contract. There are much  much more painful and annoying things to do in RE than writing a contract.

Account Closed · Answer

@Jay Hinrichs  , just wanted to confirm that, you will make the cashiers check out to the owner? not a title company? i realize you said you put it back in your acct after but just wanted to ask on that.

(fyi properties that im doing these offers on average in the 50k & lower range, good areas but houses that need allot of work (something i enjoy) so they have been on the market for a pretty long time, a buyer with financing likely wouldnt be able to get a loan on them due to condition, so im not dealing with huge sums)

@Jesse Waters  my theory that if I offer on houses I like which have been on the market for 6 months or more (some of them over a year) than some sellers may be happy to simply see any offer at all even if its 60% of asking in some cases. I look up the houses on the assessor to see how long they have owned it or if it was something they inhareted/transfered from a trust. this way im only offering on houses that are likely owned outright so there is no minimum amount they must get in order to pay off a mortgage.This method/theory requires a high amount of offers going out to see any success.

Account Closed · Answer

@Jesse Waters  @John Thedford

I really like the idea of including a large earnest deposit such as 10% or more  but could you explain that further?   do you actually give the sellers agent a check or a copy of a check? do you already have an escrow company that you intend to use in mind with the check made out to them?

to be clear, i have the funds to do this but want to be cautious with handing out checks or cashiers checks for 5k or 10k, and my intent is to offer on multiple properties.

also, going back to wanting to keep the process as quick as possible regarding making the offers would this work?: get a cashiers check for 10k made out to an escrow company I pre-choose and include a copy of it with the offer and a proof of funds showing I am not seeking financing? ....just not that comfortable handing out large checks for funds that have taken me years of saving so if im going to than I just want everything to be clear

Account Closed · Answer

Thank you guys for your responses. @Mitch Coluzzi @Dell Schlabach

I think i will make up a bunch of prefilled out offer letters so i just need to put in the property and price along with proof of funds. I prefer not to have an agent honestly, I prefer to do all negotiating myself and deal directly with the seller or sellers agent myself.

simple idea of having a bunch of the paperwork already made up and filled out that way.

@Chris K.  thanks for the input, i like your quote also " sweat equity is the best startup capital" that pretty much describes how i got myself to this point of being able to actually be an "investor" finally.

Jay Hinrichs · Answer

Account Closed

yes I make it out to the seller or myself .. .its an eye opener for a seller or sellers agent as they know you have the funds to close... I get my CC for free I just scan and e mail them then put it right back in the bank...

Having spent years buying courthouse step properties my small commercial bank is all set up to produce cashiers cheques for me simple phone call

Jay Hinrichs · Answer

Account Closed

if I really want a property I get a cashiers check for the full purchase price made out to the owner.. I scan and e mail it to them.. then I take it back and put it in my account... try it   it works... as opposed to other offers that have small deposits etc... It gets the seller and their agents attention.

EM should go to title or escrow... I would never put serious money into a west coast escrow as the seller has to sign cancellation to get it back.. by serious I mean more than 25 to 50k... But heck in SF you need 100k plus deposits if you really want something.

John Thedford · Answer

Account Closed if you are writing an earnest money check always make it payable to a title company. They have a fiduciary responsibility and are basically 3rd parties. NEVER make an earnest money check to the seller. You can suggest a title company or ask the seller if they have a preference.

Jesse Waters · Answer

I don't usually make multiple offers at once.  Our market isn't so hot that I have to keep shooting offers out.  If I am dealing through my agent to another agent, I will usually include the earnest money amount in the offer stating that the check will be sent over once the buyers accept my offer, perhaps include a copy of the check.  I usually just use a personal check, typically made out to the seller's agent's brokerage firm (Coldwell-Banker, Exit Realty, who ever it happens to be.)  I also include in the formal contract when my money goes firm, ie non refundable to me.

My offers typically sound something like this.  I or assigned (so I can include my business partner, or have him purchase it with his credit) offer $XXX with contingencies for inspection, due diligence (if it is a multi-family), partner approval and written approval of the inspection XX hours after the inspection, pending financing.  Earnest money goes firm upon notification of the inspection to be notified on an addendum.

I include all the standard jargon in our state's standard real estate contract, but put some of the things that I mentioned in addendum's to make sure that my interest are protected and I have a way out.  In everything you do with REI make sure to have an exit strategy or way out.  Partner approval & satisfactory inspection are my two favorites.  They are vague enough.

As far as the monetary amount for the earnest money deposit, I stay closer to 1% of the purchase price.  It shows most standard buyers that I am serious, but doesn't overly jeopardize my cash.  I wouldn't put 10% down with out knowing that I could recover my money should we not close.

Jesse Waters · Answer

I have negotiated verbally with the sellers before.  I bought a place from a couple that was thinning out their portfolio, they showed up when I came with my agent to view the property.  I was able to hammer out a few details with a little back and forth before I had my formal offer in.  When I submitted the formal offer I included everything that we had discussed.

I have also showed up to look at properties with a letter of intent in hand, perhaps with the sales price blank, fill it in, sign it and hand it to the selling agent.  I state at the bottom that I am represented by an agent and ask them to consider this my formal offer with official contract & addendum's to follow with in 24 hours of their verbal acceptance of my offer.  I will often include an earnest money deposit with that offer to express my seriousness at the time.  Money talks, BS walks.

JW

all offers written? are verbal offers taken seriously?

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