I got an offer-13 pages of mumbo jumbo

Buying & Selling Real Estate
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I got an offer-13 pages of mumbo jumbo

Brian Stutzman
Investor · idaho falls, ID · Member since 2008 · 83 posts · 78 votes

Ok not mumbo jumbo but leaglese.  I showed a high end house Saturday and Sunday he said he would like to float me an offer.  I was thinking a mile high 3 or 4 sentence idea of pricing and terms we could banter back and forth until we agree on the key items, then have the title company draft their documents.

but instead he hired an attorney to draft a small book that will take me hours to digest, all for the first communication.  Wow.  We have some negogating To do . The buyer is lost on the fsbo and jumped way down the line I feel.

does anyone have a simple offer form to begin neogations before it is drawn up into a legal contract.  I was blown away that his sharing of what he had on mind to start discussions came on a 13 page document drafted in 1 day by his attorney.  

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Mindy JensenPro Member
BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
6y

Wait, I'm confused. Who owns this house @Brian Stutzman? Are you an agent? If so, you should be asking your broker these questions. If not, why are you showing houses?

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BiggerPockets
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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    6y

    I actually much prefer it to start that way....no questions or assumptions about the fine details later....no surprises. I’d go with what you have. 

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  • Mark H. Porter
    Investor · SC NC, VA · Member since 2020 · 1k+ posts · 756 votes
    6y

    This is funny as I just went though this last week.  Instead of just offering a price, they called out many conditions that would need to be in place anyways due to state laws and asked me to transfer a number of units as vacant.  Even wanted 60-days from contract signing to be able to back out after more discovery.

    Your best answer may be to say all things are negotiable based on the sales price so that’s the only thing you will talk about now.

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  • Corby GoadeBusiness Member
    Investor · Boise, ID · Member since 2014 · 3k+ posts · 3k+ votes
    6y

    Hey Neighbor!

    I assume your offer isn't on an RE21? I would comb through the offer you have and make notes of the highlights- price and terms that concern you and reply in the way you want, email or phone call. You might ask a realtor or attorney to help you out- if the buyer has a lawyer, you don't want to sign anything without some sort of representation. The state of Idaho has preapproved legal forms for transactions that any Realtor can use- there are plenty of Realtors who should be able to help you with the paperwork for a reasonable commission. Feel free to PM me if you'd like some help. 

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  • Don SpaffordPro Member
    Investor · Idaho Falls, ID · Member since 2016 · 935 posts · 629 votes
    6y

    @Brian Stutzman That does seem out of the ordinary but if you need I can refer you to a real estate attorney I have been using for years, or if you need a realtor to send a counter offer, I can help you there as well. Is this property in IF?

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  • Brian Stutzman
    OP
    Investor · idaho falls, ID · Member since 2008 · 83 posts · 78 votes
    6y

    Ya don, in I f.  Fsbo. I have several realtor friends but this is kind of a high-end property and I don't want to be taken money out of the middle to pay them. I've asked the title company if they've got some forms. Thanks everybody for your insight. I really thought it would start with three or four sections to get kind of everybody on the same page and then growing into some form

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  • Steve Morris
    Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
    6y

    Well, realize the buyer is the one providing gas to the deal.  In 99% of deals the buyer writes an offer on his own form which usually leans more in the buyer's favor.

    However, it is a legitimate offer and you'll need to understand it unless on the face of it isn't even close to what you want.

    Part of the problem of being FSBO (not against them in general) is you are signing (if you proceed) a legal contract and will be bound by it - YOU NEED TO UNDERSTAND WHAT YOU ARE SIGNING.

    If it is really overwhelming but looks like it has potential, then hire a RE atty.  I don't think reading a PSA is that much and the few bucks you spend are prob cheaper than broker commission and can save you lots of money down the road.

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  • Steve Morris
    Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
    6y

    "a 13 page document drafted in 1 day by his attorney."

    BTW -  I wouldn't let that discourage you.  I broker apartments, the standard PSA we use with attachments is 25 pages.  I think the OR residential form most realtors use is about 10 pages long.

    You still need to understand it though.

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  • Mindy JensenPro Member
    BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
    6y

    Wait, I'm confused. Who owns this house @Brian Stutzman? Are you an agent? If so, you should be asking your broker these questions. If not, why are you showing houses?

    [email protected]Podcast Guest on Show #261
    BiggerPockets
    1Reply
  • Brian Stutzman
    OP
    Investor · idaho falls, ID · Member since 2008 · 83 posts · 78 votes
    6y

    I'm not really posting any questions.  It is my house and as I mentioned it's a fsbo.  I was just taking back by the first communication of an offer was 13 pages long. This wasn't a sales contract this was just floating a proposal and price at me for us to start negotiating. I've seen it done on a napkin before until we actually get some terms and numbers that work and then we write it up more formally. But this came at me pretty weirdly I think at least different than what I've ever experienced in the past for the first item of communication to be a 13-page legal document. Of course there's going to be some changes before we make it into something formal

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  • Brian Stutzman
    OP
    Investor · idaho falls, ID · Member since 2008 · 83 posts · 78 votes
    6y

    I know offense to any realtors out there but this was a higher-end price property  at least for my market and I couldn't afford 6%. As if we end up hiring a real estate attorney that would be extra on top of that commission and I can hire one on my own.

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  • Lydia S.
    Real Estate Agent · Albuquerque, NM · Member since 2015 · 542 posts · 193 votes
    6y

    @Brian Stutzman

    Sounds to me like this person doesn’t bother with napkin negotiations, has brought you an actual offer and has spent money on an attorney to do that, so he means business.
    Is it a good one?  Does it expire soon?  Do you really want to sell the property?  Because somehow it feels like you’re looking for a way out talking about finding your own forms.  The buyer has come with their form, so use it and good luck with this sale!

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  • William Hochstedler
    Broker · Logan, UT · Member since 2013 · 1k+ posts · 1k+ votes
    6y

    I've been through several situations where a buyer calls their attorney (or is an attorney) to draft an offer.  The attorney takes some contract they have from a deal a decade ago or a recycled purchase agreement that has been circulating around for years and is boilerplate but of unknown origin.  Back in the day, I saw the same obsolete lease agreement from 4 different attorneys that was originally written for a portfolio owner 15 years earlier.

    What then happens is that you take this to your attorney who charges you hourly to go through all the clauses that are no longer valid, have subsequent problematic case law, and ambiguous language.  What's more, if the contract goes south, you will now be litigating a document perhaps with unknown origin and is unsupported by convention and case law.

    Unless this is a mammoth deal with a lot of moving parts, you (and the buyer) will be probably be better protected by transposing everything to the standard RE-21 if it's residential.  

    If that's not possible, I agree with the other posts that you have no choice but to take this to an attorney. The other option is to find an agent and pay them a flat fee for their forms and E&O insurance. The costs may be similar on the front end, but again, the first option may cost a lot more to defend if something happens.

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