Jim Valentine on Real Estate
When you decide to buy a property, the process begins with an offer. Some people call it a “bid,” but it is really an offer unless you are in a true auction situation. It is your offer to the seller to purchase their property on the terms and conditions contained therein.
It is common to focus on the price, but there are many other components contained in the offer that make it yours. If you have special concerns or are competing with other people for a specific property how you customize it may be the difference between buying it, or not.
There are customary practices that dictate how most offers are written. These include how the transaction costs will be paid, the timing of the transaction and more. This is an area where you can deviate from the norm to give a little or take a little. For example, in Northern Nevada these days it is customary for the seller to pay for the owner’s policy of title insurance, and for the escrow and Real Property Transfer Tax to be split between the parties.
If you offer to pay all of these costs, then you may gain some advantage over another offer. Likewise, you can ask the seller to pay all of them. If you write that you will pay all closing costs then understand that you will be paying for doc prep, recording fees, delivery fees, maybe mobile notary fees, and more.
These do not include the items that are pro-rated, i.e., real property taxes, HOA dues, etc. When pro-rated you will pay the freight for when you own it, and they will pay for the time they own it. If you are being aggressive in price you might want to offer to pay all costs. That gives the seller a simple number that he will be receiving at the close of escrow making his decision easier.
Inspection fees can add up. Inspections serve both parties, but they are usually paid by one or the other depending on who benefits with the exception of a pest inspection for a VA loan which must be paid by the buyer per VA guidelines. Inspections inject an element of uncertainty in the transaction until the reports are delivered.
The less you can do the better to compete, but you don’t want to eliminate them so as to create too much risk on your part. You might shorten the time for them to be delivered and approved, but don’t compromise your investment safety in your zeal to buy.
Time means a lot in an offer. All cash with a 15-day close is a strong offer, but maybe the seller can’t be out in that time. Then you customize your offer and give them time, rent paid or free rent included can be options, to move after the close of escrow. Timing often becomes more important to the seller than everything else, even price. For some the thought of moving after many years of occupancy is overwhelming. You giving them 15 days, or so, to move after they have their money in hand can go a long way to benefiting you.
Shorten the inspection times pending the availability of inspector to assure them you will remove that uncertainty as soon as you can. We’ve also had our offer selected over higher priced offers for a six-month escrow period it contained. The seller of the ranch was relieved to have enough time to move comfortably. Customize your offer.
Create and enhance their confidence in your offer at every opportunity and you will stand out better than presenting a “generic” offer. Sellers and their agents do look at the details. Make your offer work for you. If it works for the seller as well then you have a meeting of the minds and likely a healthy transaction. If it doesn’t then they can make a counteroffer changing the terms that they don’t agree with. If that doesn’t work, go back at them with something that you can live with. Don’t be afraid to change other terms to adjust with a quid pro quo, this for that. It isn’t always necessary, but it can keep you and them in the game knowing that you aren’t falling out the back as you proceed.
Get the offer right for you or keep looking. The right property will fit all the way around, not just physically, financially, or emotionally. You’ll know when it’s a fit.
When it comes to choosing professionals to assist you with your Real Estate needs… Experience is Priceless! Jim Valentine, RE/MAX Realty Affiliates, 775-781-3704. dpwtigers@hotmail.com.