When a buying a home- most likely the biggest purchase you are ever likely to make- you want to be as prepared and educated as you can be, so you will know exactly what is going on while your agent is working to get the best deal for you.

Harry Khayalian spells out the basics you need to know when taking that big step and making an offer on a property.

“A written proposal is the foundation of a real estate transaction. Oral promises are not legally enforceable when it comes to the sale of real estate. Therefore, you need to enter into a written contract, which starts with your written proposal.

This proposal not only specifies price, but also all the terms and conditions of the purchase. For example, if the seller offered to help with $2,000 toward your closing costs, make sure that’s included in your written offer and in the final completed contract, or you won’t have grounds for collecting it later.”

The more you know about what is going on behind-the-scenes between brokers and the negotiating that usually takes place during a home sale, the better experience you will have.

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The beach neighborhood I am looking to buy in has been getting multiple offers on all the properties, despite this economy. What is the best way to make sure my offer is accepted?

Unfortunately, you can’t make sure. If it is a home you just have to have and you are blessed with more money than sense, then you could offer an amount way higher than the asking price. Since you don’t know for sure if anyone else is offering that much, you stand a great risk of paying more for the house than you should.

A good buyer’s agent will do the research to find out the history of homes located near the one you want to buy. Getting a good idea of what other homes have recently gone for will indicate whether what the seller is asking for is in line, and if what you plan to offer is so out in left field that it’s just emotion and not the facts that are controlling what you are going to offer. Doing so is fine as long as you realize that once you pay that higher price, there is no guarantee that you’ll ever see it again when you try to sell that new home. Other buyers may not be so eager to over pay.

If you plan to stay in the home for the next 20 years, then you certainly have a better chance of getting your money back no matter what you paid for it compared to buying it in 2009 and trying to sell it in 2012. And then, there is the insurability of the property. Hurricanes do tend to put a dent in what insurance companies are willing to insure. But they sure don’t put a dent in insurance rates.

Tim McBrayer is a licensed Realtor in the Triangle specializing in North Raleigh, North Carolina Real Estate. He is an Eco Broker and serves on the Green Builders of the Triangle education committee.

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We found a house, made an offer and gave them a deadline, but the listing agent hasn’t given us an answer. The agent is telling us it is a foreclosed home and he can’t get in touch with the bank to get a response. Is this common, or does this seem like the agent is not doing his job?

-Phallen

 I can only speculate as to what is going on with your offer. Here are my thoughts:

• You mentioned a listing agent but no agent on your side.  I am assuming you are not represented by your own real estate agent, which puts you at a disadvantage.  Still, it is hard for me to believe that an agent cannot reach their client on a bank-owned property.  Some human gave this agent the listing and that human can be reached.  If it were a short sale, banks are known for being hard to reach.  That I can understand.  Banks also usually only work week days so they may not be reachable on weekends or holidays, which can explain those delays. Otherwise, the listing agent has a broker, and you may want to ask for their assistance.

• Regarding your deadline: In Georgia, all written offers must be presented to the seller.  However, the seller is under no obligation to respond.  In the case of asset managers with banks, they are dealing with lots of properties and offers.  I know you stated you gave the bank a deadline to respond to your offer.  If your offer price was not high enough, they may have no motivation to consider it in light of the other offers they are dealing with. 

• You stated that you really like this house and the wait is driving you crazy.  Ultimately, it is your job to get them an offer they want to take.  Otherwise, the asset manager may simply work on more pressing matters, and in effect procrastinate while increasing the chances they will get another offer on the property you want.  My guess is that if they were convinced you were their best option – you would get a response.  This is where I spend a good bit of my time these days – making the case that my client’s offer is their best option.  The research is exhausting but necessary. My clients need to know the real value today and at what point they should walk away, or when to be patient and wait.  I can usually paint the picture that my client’s offer should be acted upon in a timely manner or we will be forced (by them) to go find something else.

If I were you, I would contact the listing agent’s broker and have a pleasant conversation to inquire about where things stand.  Keep the emotion way down and if you hit a brick wall, end with something like “it is too bad your client could not even respond to our offer.  Now, we have no other choice but to go buy one of their competitors”.  All the best with your quest!

Michael Bunch is a REALTOR® with Keller Williams Realty First Atlanta in Chastain Park, Atlanta, GA.

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I was wondering if every time you submit an offer, is the REALTOR® supposed to submit the pre-approval letter and pre-qualification letter plus our FICO scores? We have probably submitted 10-12 offers and we haven’t had a response from even one of them! Not even a no. I heard that when dealing with bank owned and short sales, if that information is not submitted, the the bank doesn’t even deal with it and they throw the offer out. Is that true?

-Sherrie

The banks do require that prospective buyers submit a pre-approval letter with their offer, and this is the case for properties the banks own (Real Estate Owned (REO) properties) as well as pre-foreclosure (short sale) properties. Banks do not, however, require that prospective buyers submit their FICO scores. Rather ,the pre-approval is all that need accompany your offer.
 
Despite what you may have heard, the banks will not simply throw out your offer if a pre-approval letter is not attached. They would request that a copy be submitted. That said, if the listing Realtor were to receive multiple offers on a property, and if their client has advised them only to submit the highest and best offers to the bank(s), in this situation your offer may never be submitted to the bank. 

So to answer your question, it really depends on what the property owner has instructed the listing agent to do. However, I will tell you that my group notifies all prospective parties as to the status of their offer and if the terms they offered were sufficient to earn them the top position and the honor of being submitted to the lender, or alternatively if the terms were insufficent and short of this position. Then, they would need to push on and resume their home search. 

Jason Opland is a REALTOR for Obvious Choice Realty in Columbus, Ohio.

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