Should I make offers before my Attorney checks my contracts?

Question

I found a real estate attorney but things are just moving way slower than I expected.  We found some good properties that we want to make offers on, but we haven't had our attorney look at our offer paperwork yet.  We do have our offers setup to say that if you sign and accept our offer, you'll still have to sign an actual purchase contract.  What do you think? I live in the Denver area if anyone knows a good attorney?

Jean Bolger · Answer

Will you be using a broker? Colorado uses a uniform contract, and brokers are required to use those state approved forms. Anyone CAN use those forms though, and that might be your simplest solution. You make your initial offer (you can put in your options) and negotiate the rest through the counter offers. Personally, I'd be a little leery if someone came to me (in CO) with a contract other than the state form, since it is so ubiquitous. I'd be looking really hard at it and might even feel the need to get it reviewed by my own attorney. Here's a link to the real estate commission approved forms

Guy Gimenez · Answer

@Austin Faux

LOI's are used as marketing tools in our area with much success. Like any other marketing piece, they simply weed out the motivated sellers from the unmotivated sellers. Our promulgated contract forms are 8 pages in length so filling out several for each property you wish to make an offer on would be time consuming and inefficient, and my only goal with a LOI is to see if the owner is ready to play ball. Plus, I can get the basic terms of three differently structured offers on a single page LOI.

Matt M. · Answer

x100 on what @Jean Bolger said. Follow that link to the Colorado approved forms for residential and small investment real estate here in Denver. It will also carry weight with sellers & their attorneys (if they even have one). You can say, "this is a contract that almost everyone uses here in Colorado."

If a deal goes sideways, according to a local attorney I know, you have firmer legal ground to stand on.

Don't reinvent the wheel, use the free tools. Feel free to reach out to one of us with questions.

Bill S. · Answer

@Austin Faux unless you are writing offers on Multifamily properties you are wasting your time with letters of intent. Since you are obviously making low ball offers, most agents won't give you the time of day. Since a LOI is not binding then they aren't even required by the real estate commission to present your offer. Why mess around with your none binding LOI if they are getting numerous other offers on state approved contract forms? If you are offering on MF then low ball offers are also a huge turn-off for agents and unless you take the time to demonstrate to these agents that you have cash in the bank waiting for you to sign on the dotted line then they have little reason to give you the time of day.

A LOI is a sure fired sign of someone just out of some guru boot camp that doesn't likely have any financial backing and is a huge time waster.

The Denver market is hot with the average days on market of around 1 month. That means most well priced properties are under contact within a week of being listed. It means multiple offers on those properties and it means people don't have any reason to look at or consider low ball offers. If a seller is in a hurry to sell they just price a couple percent below comparables and pick the best all cash buyer.

Right now agents are working the butts off to even find buyers properties so finding a property at a even a small 10% discount on top of that is very rare. Most agents don't have to work that hard and those that do, don't know what they are doing yet.

I wish you well and I have no dog in this fight so I'm just taking a few minutes to provide my perspective to someone who asked.

Robert Warren · Answer

@Austin Faux

I believe in self review.  I use standard contracts and then read them very carefully.

1. An attorney can't review a contract to the level that I would expect unless I shell out the big bucks.

2 She can endorse a contract that she has put together or that is standard and widely used.

In the second case what do I need the attorney for?  The contracts are standard.

If I want to add or subtract something from the standard then I would have an attorney review it.

Timothy Riley · Answer

@Austin Faux

Nice thread just what im doing now. @Bill S.

Great advice.

I find it's working best for me (time wise) to give people a few options and whichever one they agree with I have my attorney draw up the contract on that one as opposed to sending an offer having it redone and reoffered. My attorney is two to four weeks with each thing he needs to do.

Frankie Woods · Answer

Great advice @Bill S.

Wayne Brooks · Answer

Agreed that LOI's are a waste of time for SFH's, and will turn many off from taking you seriously.  And if you get something signed by an owner, you want it to be binding.

Guy Gimenez · Answer

@Austin Faux

So it sounds like you don't need to wait for your contract form to be approved since the LOI's are non-binding. In all likelihood, there will be offer / counter-offer anyway, so you can start sending out LOI's now and have your contract form reviewed by your attorney as long as he/she recognizes you're limited on your time to get the form approved/revised.

Should I make offers before my Attorney checks my contracts?

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