"If we were to make an offer......"

"If we were to make an offer......"

.....and so began this morning's question from a buyer. He asked 4 different questions, one of which is "how binding is the offer?"

thinking!Although I give a sample purchase contract to buyers at our first meeting, and talk about how offers are structured, it's often not until they are actually contemplating making an offer that they are ready to absorb the information. I want my clients to think, to ask questions, to fully understand the process.

My answer to "how binding is the offer?" varies from case to case, but includes this explanation:

  • I structure a contingency period into the offer, typically 10-17 days.
  • We make the offer contingent upon loan approval (which includes an appraisal contingency), and property condition approval.
  • If appropriate, we also have a contingency for approval of Homeowners Association documents, title conditions, or anything else that needs further investigation. Sometimes the purchase might be made contingent upon the sale of your current property.
  • If your offer is accepted by the seller, you'd have the contingency period (perhaps 10-17 days) to gather whatever information you need to decide if you can move forward with the purchase
  • If obstacles arise during your investigation, you have 3 choices: 1) accept them; 2) ask me to try to renegotiate the contract; 3) decide this isn't the right property and cancel the contract
  • If you choose not to remove your contingencies and cancel the contract, your deposit would be refunded, and you're free to continue your search.
The short answer: it's binding once you remove your contingencies.

I love answering questions like this for buyers. I want them fully engaged in the process. I want them to fully understand what they are undertaking.

After all, a home purchase is the biggest investment most people ever make.


 

--- Come for a visit; Stay for a lifetime!

Lottie Kendall, Realtor®

Today | Sotheby's International Realty

San Carlos, California, 94070

CA BRE#01215160; 650-465-4547

Lottie@LottieKendall.com;

www.LottieKendall.com

www.SFCondosForMe.com

 

 

Comment balloon 10 commentsLottie Kendall • January 27 2011 12:08PM

Comments

Lottie - Excellent blog! I love your concise answer to that eternal question of "How binding is an offer"! And as long as buyers are satisfied with knowing they are free to investigate the details of the property until contingencies are removed, they can move forward. I suggested your blog for a feature and re-blogged it!
Garrigus Real Estate

Posted by Devona Garrigus, REALTOR® / Short Sale Specialist (Garrigus Real Estate) over 6 years ago

Devona, I'm glad this resonated with you. Thanks for the 'suggest' and for the re-blog -- I'm flattered!

Posted by Lottie Kendall, Serving San Mateo County and San Francisco (Today | Sotheby's International Realty) over 6 years ago

Lottie ~  Excellent post.  I love the way you engage your Clients while allowing them the opportunity to feel comfortable asking those questions which go to the heart of a transaction.  Leaning . . .

Posted by Tish Lloyd, Broker - Wilmington NC and Surrounding Beaches (BlueCoast Realty Corporation) over 6 years ago

Educating our clients is a big part of our job, right Tish? And one that I'm happy to do. I love their questions.

Posted by Lottie Kendall, Serving San Mateo County and San Francisco (Today | Sotheby's International Realty) over 6 years ago

Lottie, very well explained! I also give them a purchase contract at our first meeting but none of what we tell them usually sinks in until we're in the middle of it!

Posted by Connie Harvey, Realtor - Nashville TN Real Estate (Pilkerton Realtors) over 6 years ago

Great blog post Lottie!  *reblogging*

Posted by Andi Grant, Helping 1st time buyers and home sellers in LA! (310-508-4354 | FirstTimeHomeBuyerRealEstate.com) over 6 years ago

Lottie - great information and a great explanation!

Posted by Peggy Hughes/pha logistix, inc., SF NYC LA (pha logistix inc) over 6 years ago

Hi Connie - I like your practice. I agree that, even though we do that, it's not until they need to know that most buyers are ready to internalize the message. I can relate, though--I'm that way with other things.

Posted by Lottie Kendall, Serving San Mateo County and San Francisco (Today | Sotheby's International Realty) over 6 years ago

Hi Andi - I'm flattered! Glad you think this is re-blog worthy!

Posted by Lottie Kendall, Serving San Mateo County and San Francisco (Today | Sotheby's International Realty) over 6 years ago

Thanks for the kind words, Peggy. Glad you found them of value.

Posted by Lottie Kendall, Serving San Mateo County and San Francisco (Today | Sotheby's International Realty) over 6 years ago

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