UPDATED (see updates 1,2,3, 4,.5 (6/26) and now 6 as of July 6th below)
Background: Anatomy of Offer to Purchase and Contract
in Chasing Waterfalls Part I and Part II we told how our client, JT,had his finances in order (pre-qualified for a CASH land purchase) ...about 40 acres with a waterfall --most acreage to go into a land trust.
We found the property, wrote and delivered a full-price CASH offer to purchase and contract with the only contingency (beside the standard appraisal contingency) being that the waterfall actually is on the property, and negotiated with the out-of-State seller through the listing agent. The seller received the offer, but requested a few more days to "deliberate", then came back with this list of demands for the buyer:
·1)pay for the survey,
•2)pay for all closing costs,
•3) pay all the commission... thus rejecting the offer ...
Immediately thereafter, the seller asked the listing agent to update the asking price on the MLS. The new asking price was $50,000 more than the original asking price. Was there a way to new, acceptable offer?
The Negotiations: To our surprise, our client was ready to negotiate. His own "deliberations" had convinced him to "rescue that waterfall!" He wanted to make another full-price CASH offer and "see how far this will go". He is adamant. "Possibly not the best idea to start negotiations with a full-price CASH offer,especially in light of what happened last time, " I explain. "Let's look at this from another perspective. " This negotiation revolves around the seller's perception that this raw, unimproved land, with no power to the property and no actual road into the land is highly desirable on the market...which it is not.
Here, in Part III we remedy that perception by moving off the full-price CASH offer. We add a number of contingencies--Instead of closing within a few weeks, we now expect four months to close, financing, survey, perc tests, access to the land for hydrologists, geologists, a busy ecologist and the moon. We fire off the new OPC, dubious at best.
Just before the deadline, the seller's agent calls to say the Offer has been accepted. But wait!
It's not in writing... It is a verbal response. FAX to follow to confirm. 48 hours later. No FAX...
UPDATE# 1 : a further demand from the seller who refuses to "sign anything until the Pre-Approval Letter is in the seller's hands..."
UPDATE # 2: Pre-Approval Letter delivered
UPDATE # 3: FAX arrived with signature. Listing agent has sent documents to seller for original signatures to be signed before a notary (out-of-State protocol) and we are moving ahead at slow waterfall speed.
Look for Update #4 and the conclusion of this adventure in the Anatomy Series.
UPDATE # 4: It has now been a week and we still do not have the originals back from the seller. The OPC was supposed to have been signed before a notary (it will be a mail-away as the seller in now in California) and overnighted back to the agent. As of last night, the agent reported that he didn't know for sure if it had been notarized and that he thought his seller would maybe send it on Monday...regular mail...stay tuned...
UPDATE # 5: The listing agent called today...He's asking...."If we have a signed FAX copy (attorneys and banks accept such documents here in N.C.) and no originals...do we still have a contract?
How would this play out in YOUR STATE?
UPDATE # 6: The listing agent explained that his client has been out in the wilderness camping. ..missed the post. The contracts, signed and ready to fly through due diligence have arrived. The listing agent even delivered them to our offices. We all breathed easier. . .and now we just have to make sure the waterfall really is ON the property! CHECK BACK
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I knew it! Contingencies of course. And I always tell the agent who is telling me verbally accepted. I'll believe it when I see it. (I sometimes get a wow...but I explain I always hear that and unless it is in my hands in black and white then all it is is heresay,.....haha)
I really hope this works out because your client has all the right and positive intentions and direction for that land!
Good luck!