I am obligated, unless notified in writing by the seller, to present all offers and therefore if an agent representing a buyer calls me and states their buyer would like to make a verbal offer I will take the offer and present it to my seller.
When I do this I tell my seller upfront this is a verbal offer and if they choose to accept it the offer will be written. Anytime I have received a verbal offer it usually consists of two points; the price being offered and the approximate closing date.
I fail to understand why this would be the means to present an offer. The FARBAR contract, which is the standard contract used by REALTORS® in the State of Florida is four pages. The price and closing date are two of the many blanks. In my opinion price and closing date are extremely important, but of equal value are repair amounts, inspection periods, financing conditions and good faith or escrow deposits.
For instance, say the buyer’s agent states they want to offer $100,000 and close in two weeks. This is the verbal offer. There are no other details given even after I ask if there are any special considerations. I present it to my seller and they agree to accept the offer. I call the buyer’s agent and the agent puts the offer in writing. When I receive the written offer I discover the buyer has put down $500 in good faith, wants a ten day inspection period, needs to close on their home which is under contract and set to close two days before the specified closing, and wants the seller to pay up to $1,000 in repairs.
Suddenly a verbal offer which sounded really good has too many pitfalls and the seller who was excited about selling their home has to consider the offer in a whole new light. Now if the buyer’s agent had let me know about the additional details then I could have advised my sellers appropriately at the outset.
I honestly believe the buyer’s agent is acting in good faith when he/she conveys the verbal offer but if I were to have a buyer who was interested in making a verbal offer I would ask them to provide as many details as possible. I understand a buyer’s desire to approach a seller with an offer verbally at first in order to get a feel for the seller’s motivation. However I do not understand why a buyer would not give concise details that affect the ability to reach the closing table.
There have been times when a buyer I was working with has requested I make a verbal offer. When this request is made I pull out a blank FARBAR contract and go over it in detail. I do this so the buyer understands more goes into an offer than the price. At this time I also find out if the buyer has any special contingencies that might affect the seller’s desire to accept the offer. I am then able to contact the seller’s agent with a verbal offer which has some meat to it so if the seller agrees there are no surprises when that written offer is presented.
In my opinion verbal offers leave too much room for misunderstandings. I say if you are serious about making an offer, put it in writing.
Friday, December 12, 2008
Buyers -- What a REALTOR Does for You (Part 3)
Up to this point I have met with the buyers, viewed properties with them, researched those properties, presented an offer to the seller’s agent or seller and negotiated the offer to reach a legally binding Contract for Sale and Purchase. (See Part 1 and Part 2 to this post.)
Once the contract is signed the specifics of the contract have to be met. Usually there is an inspection period. It is during this time period when the buyers hire a home inspector to perform an inspection, an inspector to perform a wood-destroying organism inspection and any other inspections the buyers require. As a rule I attend these inspections with the buyers. I attend in order to represent the buyers’ best interest. I also attend because I learn so much about construction and the operating systems of a home.
Hopefully the home inspection does not reveal any major defects. But if it does, I explain the buyers’ options in this situation. If the buyers want the defects to be remedied I present an addendum to the contract stating exactly what remedy the buyers’ desire. The seller may or may not agree to accept the addendum. Once again there are negotiations where I represent the buyers to reach an equitable solution.
Once an agreement is reached and we are still under contract I continue to work for the buyers. Most of this work is behind the scenes and typically involves checking in with all parties to make sure the specifications of the contract are being met, financing is in place, the title is clean and everything is still on track to close on the specified date.
Sometimes this period is quiet as everything smoothly progresses. Other times I can be on the phone or running from one place to another trying to resolve an unexpected issue.
As an example, recently I had to locate a contractor to complete a repair required by the lender prior to closing and negotiate with the seller’s agent an agreement to get this done. The contractor I originally had scheduled failed to follow through and I had to find a substitute who could complete the repair in 72 hours. I did find a substitute but in the meantime negotiated with the lender to close and hold back funds in case the repair could not be completed. I spent no less than thirty hours over a two week period resolving this one issue while still working to make sure not only this buyer would close on schedule but also working with other buyers.
Prior to closing I have received and examined the settlement statement. The settlement statement shows exactly what money went where. The settlement statement (or HUD as it is commonly called) has one column for the buyers and one column for the sellers. Each column has debits and credits relating to the transfer of the property.
On the way to closing I accompany the buyers on a final walk-through of the property. This is done to make sure the buyers are receiving the property in the condition under which the contract was made. This is an important step. You really don’t want to know what I have seen to convince me this is absolutely necessary.
Hopefully all the above has worked out and the buyer and I arrive at closing. I don’t appear to do much at closing beyond sit there, however I am there to make sure there are no surprises. I am pleased to report that it is only on rare occasions that something comes up to prevent closing and even if something does come up it only delays closing.
At this point I hand the keys over to the buyers and welcome them home.
Several days after closing I call the buyers and make sure their move went smoothly. I answer any questions they may have and let them know I will check in with them periodically.
I hope this series of posts has been helpful.
Once the contract is signed the specifics of the contract have to be met. Usually there is an inspection period. It is during this time period when the buyers hire a home inspector to perform an inspection, an inspector to perform a wood-destroying organism inspection and any other inspections the buyers require. As a rule I attend these inspections with the buyers. I attend in order to represent the buyers’ best interest. I also attend because I learn so much about construction and the operating systems of a home.
Hopefully the home inspection does not reveal any major defects. But if it does, I explain the buyers’ options in this situation. If the buyers want the defects to be remedied I present an addendum to the contract stating exactly what remedy the buyers’ desire. The seller may or may not agree to accept the addendum. Once again there are negotiations where I represent the buyers to reach an equitable solution.
Once an agreement is reached and we are still under contract I continue to work for the buyers. Most of this work is behind the scenes and typically involves checking in with all parties to make sure the specifications of the contract are being met, financing is in place, the title is clean and everything is still on track to close on the specified date.
Sometimes this period is quiet as everything smoothly progresses. Other times I can be on the phone or running from one place to another trying to resolve an unexpected issue.
As an example, recently I had to locate a contractor to complete a repair required by the lender prior to closing and negotiate with the seller’s agent an agreement to get this done. The contractor I originally had scheduled failed to follow through and I had to find a substitute who could complete the repair in 72 hours. I did find a substitute but in the meantime negotiated with the lender to close and hold back funds in case the repair could not be completed. I spent no less than thirty hours over a two week period resolving this one issue while still working to make sure not only this buyer would close on schedule but also working with other buyers.
Prior to closing I have received and examined the settlement statement. The settlement statement shows exactly what money went where. The settlement statement (or HUD as it is commonly called) has one column for the buyers and one column for the sellers. Each column has debits and credits relating to the transfer of the property.
On the way to closing I accompany the buyers on a final walk-through of the property. This is done to make sure the buyers are receiving the property in the condition under which the contract was made. This is an important step. You really don’t want to know what I have seen to convince me this is absolutely necessary.
Hopefully all the above has worked out and the buyer and I arrive at closing. I don’t appear to do much at closing beyond sit there, however I am there to make sure there are no surprises. I am pleased to report that it is only on rare occasions that something comes up to prevent closing and even if something does come up it only delays closing.
At this point I hand the keys over to the buyers and welcome them home.
Several days after closing I call the buyers and make sure their move went smoothly. I answer any questions they may have and let them know I will check in with them periodically.
I hope this series of posts has been helpful.
Buyers -- What a REALTOR Does for You (Part 2)
At this point I have met with the buyers, viewed properties with them, researched their choices and presented an offer to the seller’s agent or seller. (See Part 1 of this post.)
The seller usually has a day or two to consider the offer. Sometimes the seller will accept the offer as presented but more often than not there is some type of counter offer and negotiation. During negotiations I work to reach an equitable deal for the buyers as the seller’s agent is looking to negotiate the most equitable deal for his/her seller.
The price is not the only point negotiated in the offer. Although the price is an extremely important factor sometimes sellers are better served by taking a lower price in order to close earlier or remove other contingencies.
In order to negotiate effectively I have researched past sales for the area and other homes on the market. If there is financing involved I have spoken (with the buyer’ permission) to the lender about rates, payments and timeline s for closing. I want to make sure the offer being submitted is valid and can be fully executed. I have also searched public records in order to find out as much information on the home as I can, such as what the seller owes on a mortgage and if renovations have been properly permitted.
Sometimes an offer can be made on a property and it is automatically accepted with no negotiation. Other times there can be an incredibly lengthy negotiation with several offers and counter offers. As an agent it is my responsibility to keep track of all points of the negotiation and relay them to my client.
There are several things to remember during negotiations.
1. Once an offer or counteroffer is made it can be withdrawn if it has not been accepted by the other party even if it is prior to the time of acceptance period stated in the offer.
2. Once a counteroffer is made the original offer is terminated and can no longer be accepted.
3. A seller is not required to entertain or negotiate an offer.
4. A seller does not have to accept an offer even if it is a full-price offer.
5. If a seller receives multiple offers, the seller is under no obligation to negotiate the offers in the order they are made.
6. Unless otherwise stated inspection periods and other contingencies usually refer to calendar days not business days. Make sure contingencies for inspections, financing and appraisals allow enough time to complete the contingency.
7. A contract is not valid until all parties have signed the contract. The effective date is the date the final party signs the contract.
Although it is not required, I prefer all offers and counteroffers to be written so there can be a record. When an agreement between all parties is reached the offer should be written and then signed and dated by all parties to the contract.
Once all parties are in agreement and the final agreement has been signed and dated by all parties we have a valid contract for sale and purchase.
In Part 3 I will explain what a REALTOR® does from the time there is a valid contract until closing.
Buyers -- What a REALTOR Does for You (Part 1)
Lately I have met with quite a few buyers who don’t want to work with a REALTOR®. The reasons are varied but they all really boil down to one fact, the buyer thinks they can buy a house without representation and get a better deal.
Let me put value into what a REALTOR® can do for the home buyer. Buying a home is more than locating a house, making an offer and then paying for it. Although that is possible, there are details that should not be overlooked.
As buying a home is a lengthy and involved process I will break it down into three different posts. This first post will cover the initial meeting to putting in an offer. The next two posts will cover negotiating the offer through having a Contract for Sale and Purchase and the execution of the contract.
When I work for buyers I start by talking with the buyers and determining what it is the buyers need in a home. Once I have determined those needs I start researching the market. I look at what is on the market now and then I look at sales over the past couple of months. With the needs of the buyers in mind I locate a variety of properties to view.
After I have a list of potential properties I show the list to the buyers who then decide which properties they would like to see.
While I was researching properties I have asked the buyers to meet with a financial representative of their choice to start the financing process. Sometimes the buyers find they cannot afford the original price range and I need to adjust the criteria. It is better to know this prior to viewing properties.
While viewing properties I take copious notes on each property and the buyers’ preferences. I do this for several reasons. The number one reason I do this is so the buyers can focus on each property and I can later remind them of the pros and cons. I also do this to be able to narrow criteria and possibly locate a more suitable property. And I do this so I can give detailed feedback to the listing agent.
Once the buyers have viewed properties and narrowed the selection down I start researching the property history. This information can be extremely beneficial in negotiations. The information can also make one property stand out as the best value. Knowledge is definitely power when making an offer and negotiating a sale.
After the buyers have made a decision to make an offer I write the offer and then I explain the offer to the buyers making sure the buyers understand the parts of the contract and the precise timeline for acceptance, inspections and closing. Once the buyers have signed the offer I present the offer to the seller’s agent and/or the seller.
Let me put value into what a REALTOR® can do for the home buyer. Buying a home is more than locating a house, making an offer and then paying for it. Although that is possible, there are details that should not be overlooked.
As buying a home is a lengthy and involved process I will break it down into three different posts. This first post will cover the initial meeting to putting in an offer. The next two posts will cover negotiating the offer through having a Contract for Sale and Purchase and the execution of the contract.
When I work for buyers I start by talking with the buyers and determining what it is the buyers need in a home. Once I have determined those needs I start researching the market. I look at what is on the market now and then I look at sales over the past couple of months. With the needs of the buyers in mind I locate a variety of properties to view.
After I have a list of potential properties I show the list to the buyers who then decide which properties they would like to see.
While I was researching properties I have asked the buyers to meet with a financial representative of their choice to start the financing process. Sometimes the buyers find they cannot afford the original price range and I need to adjust the criteria. It is better to know this prior to viewing properties.
While viewing properties I take copious notes on each property and the buyers’ preferences. I do this for several reasons. The number one reason I do this is so the buyers can focus on each property and I can later remind them of the pros and cons. I also do this to be able to narrow criteria and possibly locate a more suitable property. And I do this so I can give detailed feedback to the listing agent.
Once the buyers have viewed properties and narrowed the selection down I start researching the property history. This information can be extremely beneficial in negotiations. The information can also make one property stand out as the best value. Knowledge is definitely power when making an offer and negotiating a sale.
After the buyers have made a decision to make an offer I write the offer and then I explain the offer to the buyers making sure the buyers understand the parts of the contract and the precise timeline for acceptance, inspections and closing. Once the buyers have signed the offer I present the offer to the seller’s agent and/or the seller.
Tuesday, July 29, 2008
It's time for Back to School!
Was that a collective groan I heard? Do you remember a few short months ago when you wondered what you were going to do all summer? The end is near…
Lake County Florida School is back in session August 18, 2008.
It is time to go hunting for those incredible deals on school supplies. This is my children’s favorite part of back to school. (That is until I inform them that they do not need a new backpack, pencil box, lunch box, or pair of scissors because last year’s is still perfectly good – there are needs and there are wants.)
With plenty of sales the savvy shopper has to make a plan in order to make sure she has the best deal.
It’s a little like house hunting. There are many deals to be had but sometimes what appears to be a great deal is only mediocre.
I’ve been researching homes in the price range of $175,000 to $205,000 for some clients. The thing about this price range is there is a bunch of inventory that falls into the range. Even when I get specific on the number of bedrooms and square footage I end up with many results. The trick is determining from all those homes which home is the best value.
For $189,000 you can get an older home in an established neighborhood where homes have maintained a steady increase in value. This home might need a little updating but it has a good floor plan and has been well maintained.
On the other hand, for $193,000 you can get an almost new home with flashy stainless steel appliances and granite countertops. The neighborhood was the place to buy a couple years ago and home values were driven up fast. The seller is sacrificing the home for well below market value in order to cut off the financial drain he is experiencing.
Which would you choose?
It seems that most people I’ve run into lately would go for the newer home. They see a $4,000 difference and a great bargain to boot. This seller is sacrificing his home. They see built in equity.
Don’t let those flashy appliances and sleek countertops blind you. You need to look more closely at the value.
In the case of my clients we looked at several homes from both examples. For them the best value was a newer home that the seller was sacrificing. The HOA fees are inexpensive, it is closer to work and the home values in the neighborhood have stabilized.
We saw many homes and some appeared to be an incredible deal but when it came down to numbers the value disappeared. A professional REALTOR® can give you advice on which home is the better choice.
Lake County Florida School is back in session August 18, 2008.
It is time to go hunting for those incredible deals on school supplies. This is my children’s favorite part of back to school. (That is until I inform them that they do not need a new backpack, pencil box, lunch box, or pair of scissors because last year’s is still perfectly good – there are needs and there are wants.)
With plenty of sales the savvy shopper has to make a plan in order to make sure she has the best deal.
It’s a little like house hunting. There are many deals to be had but sometimes what appears to be a great deal is only mediocre.
I’ve been researching homes in the price range of $175,000 to $205,000 for some clients. The thing about this price range is there is a bunch of inventory that falls into the range. Even when I get specific on the number of bedrooms and square footage I end up with many results. The trick is determining from all those homes which home is the best value.
For $189,000 you can get an older home in an established neighborhood where homes have maintained a steady increase in value. This home might need a little updating but it has a good floor plan and has been well maintained.
On the other hand, for $193,000 you can get an almost new home with flashy stainless steel appliances and granite countertops. The neighborhood was the place to buy a couple years ago and home values were driven up fast. The seller is sacrificing the home for well below market value in order to cut off the financial drain he is experiencing.
Which would you choose?
It seems that most people I’ve run into lately would go for the newer home. They see a $4,000 difference and a great bargain to boot. This seller is sacrificing his home. They see built in equity.
Don’t let those flashy appliances and sleek countertops blind you. You need to look more closely at the value.
In the case of my clients we looked at several homes from both examples. For them the best value was a newer home that the seller was sacrificing. The HOA fees are inexpensive, it is closer to work and the home values in the neighborhood have stabilized.
We saw many homes and some appeared to be an incredible deal but when it came down to numbers the value disappeared. A professional REALTOR® can give you advice on which home is the better choice.
Interested in buying or selling a home in northeast Lake County Florida, including Eustis, Mount Dora, Howey-in-the-Hills, Tavares and Sorrento contact JoEllen E. Stranger-Thorsen, REALTOR® for all your real estate needs. Visit my website.
Thursday, June 12, 2008
Are you taking a stay-cation?
Gas prices are hovering around $4.00/ gallon (diesel is $4.75/ gallon on a good day,) airlines are charging for checked bags and talking of fare increases and surcharges, and restaurants are raising prices because their suppliers are raising prices. The family budget is feeling pinched and you might not be able to eke out the traditional road trip vacation.
Personally I am faced with the children being out of school and I am trying to come up with fun things to do on the cheap for 2 ½ months. I have already checked out The Eustis Memorial Library summer reading program and put it on the schedule. We will travel to exotic locales through the pages of books. We will be limited only by our imaginations. We will also go to the park, take some nature walks and go to the Eustis Pool.
We have several options for weekend getaways all within a couple hours of home. These mini-vacations are fabulous and affordable. I usually find these getaways more relaxing than the week-long road trips. There is less planning, less packing and less preparation.
Fabulous beach locals such as Daytona Beach, New Smyrna Beach and Cocoa Beach are as close as one hour.
Historic St. Augustine can be reached in just under two hours.
This summer -- as you are feeling the budget crunch, yet yearn to get away-- select a destination close to home and explore your own backyard.
Thursday, June 5, 2008
Benefit Basketball Tournament for Kyle Thrush
Kyle Thrush is a Mount Plymouth youth who suffered serious head injuries in a dirt bike accident in April. He was given a 4% chance to live. Through his own determination, the power of prayer and skilled specialists he has beaten those odds. Kyle is currently in a rehabilitation center in Jacksonville, FL. He is on track to return home before the end of summer.
Friends of the Thrush family have coordinated several benefits to help offset the family’s medical expenses and other related expenses.
This weekend Florida Hospital Waterman is sponsoring a charity basketball game for Kyle. Faith Lutheran School (coached by Michael Repass) and WESH-TV 2 (coached by Greg Fox) will team up on Saturday, June 7, 2008 at Faith Lutheran Christian Life Center, 2715 South Grove Street, Eustis, FL.
The basketball warm up begins at 6:30 PM and game time is 7:00. Tickets are available at the door and seating is limited.
A silent auction including sports memorabilia and a bake sale will begin at 5:30 PM.
All contributions are appreciated and will be directed to the Thrush family to help with the financial burden. Direct donations may be made at any of the five branches of The First National Bank of Mount Dora or mailed to: FNB, P.O.Box 995, Sorrento, FL 32776. Please note “Kyle Fund” on the check’s memo line
Friends of the Thrush family have coordinated several benefits to help offset the family’s medical expenses and other related expenses.
This weekend Florida Hospital Waterman is sponsoring a charity basketball game for Kyle. Faith Lutheran School (coached by Michael Repass) and WESH-TV 2 (coached by Greg Fox) will team up on Saturday, June 7, 2008 at Faith Lutheran Christian Life Center, 2715 South Grove Street, Eustis, FL.
The basketball warm up begins at 6:30 PM and game time is 7:00. Tickets are available at the door and seating is limited.
A silent auction including sports memorabilia and a bake sale will begin at 5:30 PM.
All contributions are appreciated and will be directed to the Thrush family to help with the financial burden. Direct donations may be made at any of the five branches of The First National Bank of Mount Dora or mailed to: FNB, P.O.Box 995, Sorrento, FL 32776. Please note “Kyle Fund” on the check’s memo line
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