Web sites and news publications are loaded with tips on how to get your home purchase offer accepted.
In a strong seller’s market, home buyers would do well to actually read them. Multiple home purchase offers are common throughout most areas.
Yet many buyers and agents don’t quite get it when it comes to making sound, acceptable offers, and then wonder why they lose out with what they believe are great offers.
Your home- buying offer could be great and perfect for the property. Unfortunately some offers fail to get read because they are drawn up in such a slap-dash fashion, listing agents and sellers are turned off before they turn any pages.
Here’s a look at a recent listing and the type of purchase offers I received and why most of them never warranted consideration.
Failure to understand the market
In the deal, I informed all agents that I had eight offers and that one agent came in at almost $100,000 lower then the other lowest offer and the list price of the home.
The property was priced right, well within range of other comparable properties’ selling prices.
The agent failed to prepare a market analysis for their client before they wrote an offer. Also, eight offers should have been a clue that the home would sell for at least the fair market value, if not more than the asking price.
Not sweating the small stuff
Another offer had the wrong property address. When I brought this to the agent’s attention, he forwarded an offer with the right address and a cover letter from the buyers stating how much they loved the home, enjoyed the open house and had fallen in love with the separate family room.
The home did not have a separate family room and there was no open house scheduled at the seller’s request.
The agent clearly ignored details.
When the sellers read the letter with the wrong property address, they laughed and said “Next!”
Another purchase offer was attached to a pre-approval letter that was typed in a Word document with no loan officer contact information, phone number, email address, etc., nor was it on company letterhead.
It was unprofessional. I researched and contacted the loan officer who explained he had no web site and his email address was a long email address with a lot of numbers at a Yahoo.com email address.
Just like the real estate agent who shows up with ripped jeans and inappropriate T-shirt to a presentation, you never get a second chance for a first impression.
Failure to follow purchase offer instructions
On the multiple listing service, I specifically stated that all purchase offers were to be sent to me at a specific time on the date of the presentation. Later than evening I had an appointment with the sellers and needed time to read through and dissect each offer and verify the buyer’s ability to buy the home.
Also, my client’s residence was about 80 miles from my office and I wanted to make sure I had enough time to make it through traffic and deal with other issues that can cause delays.
I also specifically requested emailed questions rather than phone calls because I knew I’d be in meetings all day. I had planned get back to agents in between meetings with detailed responses to their questions.
One agent continued to call me and sent me an offer after my planned meeting time with the sellers. By then the seller had already accepted another purchase offer.
Follow instructions. Respect an agent’s reasonable approach to a given sale.
Not understanding your client’s limits
One offer came in much higher than the amount on the borrower’s mortgage-approval letter – an instant red flag.
The agent explained the buyers were trying to borrow extra funds from family members, something that could kill the borrower’s mortgage application.
Lenders typically do not accept money borrowed from the family members as part of the financing package unless there is a clear and defined note that states the terms of the loan, much like a traditional second loan.
However, family members typically don’t want and can’t afford to wait 30 years to get their money back. A family loan is usually a two- to five-year loan with larger payments that could cause the homebuyer a lot of financial hardship not far down the road.
That puts the lender at risk.
Over-committing and over-promising with borrowed family money indicated the buyer likely wouldn’t qualify.
Pulling a disappearing act
When you write an offer on a property, until everyone has signed off and agrees to the deal, the property is still for sale, on the market and open to other bidders.
You may have the best offer, but the other agent and seller could require some clarification, additional documents or other concerns met before the deal is sealed.
If you are unavailable, the next willing, able, and available buyer can step up and snatch the deal right out from under you.
Stay in touch and have a clear and open line of communication with your agent at all times. Don’t go on vacation in the middle of negotiations.
Hope you found this article useful. Give me a call if you have any questions.