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Verbal offer lower than other rejected offer but agent asked for a formal offer anywa
Price: $1.2M
Offer: $900k
I had my agent call to see if the seller would accept this price because it's been on the market for a year.
The seller's agent said the owner had rejected a $1M offer in the past, but it's been awhile so maybe and asked for a formal offer with proof of funds and pre-approval.
Why?
Why not just ask the seller since they'd already declined a $1M offer instead of having us do more work.
From my perspective, if they want to sell, they have a verbal offer they can accept, and if they don't want to present a verbal offer, the seller probably isn't very motivated.
What would be the point of sending a formal offer in this scenario?
Because until it's in writing it's not a real offer.
Quote from @Daniel Vroman Rusteen:
Price: $1.2M
Offer: $900k
I had my agent call to see if the seller would accept this price because it's been on the market for a year.
The seller's agent said the owner had rejected a $1M offer in the past, but it's been awhile so maybe and asked for a formal offer with proof of funds and pre-approval.
Why?
Why not just ask the seller since they'd already declined a $1M offer instead of having us do more work.
From my perspective, if they want to sell, they have a verbal offer they can accept, and if they don't want to present a verbal offer, the seller probably isn't very motivated.
What would be the point of sending a formal offer in this scenario?
I agree with you. Why bother putting a whole contract together for someone to tell you 900k is too low. However, you could try pushing again with the 900k (cash, DSCR, conventional etc) plus whatever terms/contingencies you want to add. If they agree, then put the real offer together If they say they still want the real offer, then just do it.
An agent isn't required to present an offer if it isn't in writing. If the agent is suggesting to put it in writing it might be because he can now nudge the seller into accepting a lower than previous offer since the house has been on the market for a long time with no other potential buyers. You won't know until you put it in writing and an earnest money deposit.
What happens a lot is someone calls the listing agent and says, "I'll pay $900K for that house." Then the listing agent calls the owner and tell them about the verbal offer. He convinces them that it's a good offer and the seller ends up agreeing. Then the person that made the offer decides they don't want to do it anymore. Now the listing agent looks like he can't bring in any serious offers to the seller.
Another version of this is the offer comes in verbally, then when it comes time to put it in writing the buyer has expensive or unrealistic contingencies.
It only takes a few minutes to write up a contract.
A verbal offer is worth the paper its printed on.
#3 Managing Your Property Contributor
Because having a written offer means more than a verbal offer. Also the seller may have changed their mind or perhaps others terms in your offer are better than the previous one-it isn't always about the price.
It takes 5 minutes to put together a formal offer and show proof of funds. Seller probably gets a ton of verbal low balls and he wants to see who is serious and who has cash. If the deal is worth it then why would e-signing a few pages be the hold up here? Maybe he thinks that a 950k counter is possible once a negotiation is started. That's the game, just have to play it.
Quote from @Daniel Vroman Rusteen:
Price: $1.2M
Offer: $900k
I had my agent call to see if the seller would accept this price because it's been on the market for a year.
The seller's agent said the owner had rejected a $1M offer in the past, but it's been awhile so maybe and asked for a formal offer with proof of funds and pre-approval.
Why?
Why not just ask the seller since they'd already declined a $1M offer instead of having us do more work.
From my perspective, if they want to sell, they have a verbal offer they can accept, and if they don't want to present a verbal offer, the seller probably isn't very motivated.
What would be the point of sending a formal offer in this scenario?
I think Seller's agent did the right thing by making you and your agent believe that there is a chance for you. Now, it is up to you how you want to close the deal. Since many details are missing in your post so it is hard to see the overall picture from the Seller's perspective. But if you think at $900K is a price point that you can get it, and you have the finances, don't make a big issue about and ask your agent to prepare the offer and send it right away.