You have made the decision! It’s time to make an offer on that special Seattle home.
Like many steps along this journey, you have had to stop, analyze and consider the outcomes before moving forward. That makes you more prepared for possible surprises along the way.
The same goes for this important step. You and I – buyer and broker – should spend some time discussing market conditions in the area near your desired home. We need to check one last time how comparable homes are currently priced as well as what pending and recently sold homes are valued. Armed with this fresh information, buyers are more educated and better prepared to discuss an offer price with their broker.
But wait, there’s more! There are other factors that play into the offer price, including what personal property (curtains, freezer, lawn mower, patio furniture) stays behind. The purchase and sale agreement (aka “the offer”) generally calls for certain items – built-in appliances, carpeting, cooling and heating system, shrubbery – to stay. Buyers should state clearly what additional items they wish to own as part of the offer. They should factor in the cost of those special items and not assume the seller is being generous by giving away their belongings.
At the same time, a good buyer’s agent is speaking with his/her counterpart to learn as much as possible about the seller and his/her motivations and priorities. For example: What is the seller’s anticipated timeline to close a deal? Is this a relocation situation that will require funds from the sale to be put toward another home? Have there been other offers and, if yes, how many? And what would it take to put an offer at the top of the list?
Meantime, a buyer’s agent is also going to ask a lot of questions of his/her client – usually before this moment in the process. What are the buyer’s priorities with the offer (see our blog post on contingencies)? When would the buyer, after consulting with his/her lender and escrow representatives, wish to close and does that timeline factor in conducting possible inspections and the seller’s own timing? (Tip: It’s better to avoid closing on a Friday or just before a holiday – in case the BIG day is delayed for bad weather, ill health or a paperwork snafu.) What if no agreement is reached, then what?
Now that we know the buyer’s position and have more information on the seller’s situation, it’s time to sketch out a solid offer with the most favorable terms for the buyer and one that will elicit a positive response from the seller. Think in price ranges before coming up with a final figure.
Also, always plan two or three steps ahead. If the buyer wishes to start with a low offer, his/her agent will help play out the scenario should the seller reject it because of the price. Would the next step be a new, higher offer? Well, okay, but who would have the negotiating leverage then?
It’s conceivable the seller will even ask his/her agent to share terms of existing offers – including yours, if previously submitted – with other buyers planning to make an offer. That’s a savvy seller! Why? He/she is releasing details to help develop a competitive-offer situation as well as to guide new buyers contemplating their next move.
An aware buyer’s agent will offer strategies in anticipation of counteroffers and multiple offers. There are always pros and cons to making offers and when to make them. Brokers often counsel buyers to put in the best possible offer the first time. Buyers may not get a second chance, particularly in a competitive market.
The buyer’s broker is responsible for submitting all offers to the seller. However, establishing an offer price and considering an escalation clause, determining the types and number of contingencies, including a personally handwritten letter to the seller, and whether to accept a counteroffer are all decisions made by the buyer.
Brokers advise buyers. Buyers then direct brokers.
The offer can be submitted by the broker electronically or, ideally, in person with the seller and his/her agent present. In the second scenario, the buyer should consider attaching a copy of the earnest money check with the offer for greater impact. (Cashier’s checks are better than personal checks but both are permitted. If the offer is accepted, the money is held in escrow until settlement and usually applied to the down payment and closing costs.)
If meeting face-to-face, a good buyer’s agent is keying on the strong points of the offer and making sure to highlight terms the seller’s agent said were important to his/her client. Now, that’s making a statement!
With an offer in the hands of the seller, responses and follow-up negotiations can move rather quickly. After all, most sellers review offers as they come in and generally respond in quick fashion. Every seller is slightly different from the next, of course: They may be out of town, need a day to “sleep on it” or simply agree to accept the offer.
In this critical stage of the process, it’s important for a buyer to have his/her phone nearby, turned on and charged. Be available for up to 72 hours after the offer is submitted. A seller may submit a counteroffer and the proverbial ball is back in the buyer’s court.
Yes, time is of the essence! No problem. A good buyer’s broker has already coached his/her client on appropriate counteroffer responses and will be prepared to act.