As a buyer’s agent, I don’t present a verbal offer to a listing agent. However, I will notify the listing agent that an offer will be produced from my end epecially if the property is a hot commodity. But I do this with caution. Most of us know better. Buyers’ decision does change. And it can change unexpectedly…and randomly. Perhaps, after a sip of coffee or after watching a reality show?
Even though Realtors have an obligation to present all offers as quickly as possible as stated in Article 1 (SOP 1‐6) of the Code of Ethics, not seeing the whole terms and conditions is an invitation to commission of errors and omissions by transmission.
Here is a sample scenario:
Buyer’s agent called listing agent to present a verbal offer. Buyer’s agent relayed to the agent that the total purchase price offer is $10,000 less than the asking. Good so far. Crystal clear. Then the buyer’s agent proceeded,”With $5000 in seller’s concession.”
To clarify, the listing agent asked, “So basically, the offer is $15000 less than the listing price”
The buyer’s agent said, “No. Just $10K less, then the seller has to give the buyers credit of $5000 for closing costs and prepaid items.”
At this point, both agents should agree to dismiss the communication regarding the verbal offer and continue on when the contract is written in black and white.
Now, as a listing agent, I would like to see the whole picture. Showing me the money is good but showing me what you got is better.
Real estate purchase contract is not all about the purchase price. Sometimes, a listing agent’s heart pulsates faster and eyes grow bigger when the figure on the line across the purchase price is equivalent to the listing price. However, our sense and sensibility are already trained to temper the tempest until full review of the elements of the contract is completed.
Undoubtedly, the purchase price is the first essential element on the contract being the amount of consideration for the mutual exchange of the property. It is the pivotal point where the minds of the buyers and the sellers meet.
What about the deposit? Is there a rule of thumb in gauging the most appropriate or acceptable deposit? The deposit signifies a crucial element. The importance of being earnest. Seriously, how serious you think the buyer is if the deposit associated with the contract is $500? Or $1000 for a $200,000 home?
Don’t blame it solely on the buyer, especially first-time buyers. They usually ask their agent on how much deposit they need to give. The deposit attached to the contract is another way of conveying the buyer’s serious intent to purchase.
The interest rate. I will scream in disbelief if I see nowadays an interest rate of 3.25% without points under the mortgage contingency. If you know of a loan officer who can give this interest rate without paying points, please do share.
The mortgage contingency date. It takes longer these days to get a commitment letter. Before, a loan officer can confidently say that he can provide commitment letter within 21 days. Now, it can take more than 30 days. In some instances, the delays can be caused by the buyers themselves.
The home inspection date. A home inspection contingency date of 14 days after the date of the fully executed contract is normal as there are some tests like radon and well water which take at least 3 days to get the results back.
The closing date. Usually, anything within 60-90 days is acceptable for traditional sale of resale homes.
If I have to negotiate each line item with another agent, I would presume that the agent has been hibernating for a year with sleeping beauty.
This thought led me back to my early days in this business. One of the veteran brokers here in Manchester once said, “I don’t only screen my clients. I also screen agents.”