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57 Comments on Verbal Offers are Terrible Advocacy
If the buyer can't put the time into a written offer, they are not serious about the purchase and probably wasting their agent's time. It's good to make them understand that real estate transactions must be in writing to prevent confusion and give both parties the full picture.
If it's verbal it's not worth the paper it's written on.
Phil:
An offer must be in writing in California. Otherwise, how does one know all the terms and conditions of the offer.
My reply... "Put it in writing." There is nothing to negotiate, in my opinion, unless we have the buyer's commitment to terms.
Phil, As you know, a written offer is not a contract in NY. Neither party has any legal obligation to the other party until there is a fully executed contract.
Having said that, I still require buyer/brokers to submit the REBNY offer form for my listings. I send them the form to fill out and return if they don't submit it with offer.
Required Information: Amount of offer, terms, (financing contingency if any, amount, pre approval letter), anticipated closing date, buyer's employer and legnth of employment, buyer's annual income (current and last year) liquid assets excluding pension, annual debt, net worth and attorney contact info.
For coops the buyer must submit a signed REBNY financial statement along with the offer form. While the offer and counter offers are not legally binding, once an offer is accepted and contract executed for a coop purchase, the signed REBNY financial statement will protect the seller. If the buyer made any misrepresentations or omissions on the signed financial statement submitted with their offer and they are turned down by the coop board, the seller may be able to keep the 10% deposit.
Hi Phil, I send all offers in writing. Then I call the agent to give them a heads up that the offer is being faxed. Then I call so make sure it was received. And you are right, it's not unusual to get into contract 2 weeks after an offer is accepted.
When I get calls for a verbal, I tell them it has to be faxed or emailed, period. If not, I do not consider that offer real.
Phil, this is good advice. If it isn't in writing, it isn't an offer in my opinion. In my business I use a Letter of Intent to get an offer down on paper. Its a great way to start the negotiating process.
I am dealing with a Seller that wants to negotiate verbally after submitting an Offer To Purchase. The Listing Agent keeps calling countering the offer, and I keep asking him to put it in writing back to me and I will present. I am not making any progress with getting it in writing, which leads me to believe that the seller is not serious.
J. Philip The old rationale that "I don't want to waste my time writing up an offer if it isn't going anywhere" is ironic- the best way to make sure an offer goes nowhere is to make a halfhearted, verbal offer …If you want to make that sale, you have to do work- it isn't a waste of time, it is your job.” I get these calls from agents all the time. They tell me what they want to write an offer for … and ask if seller will accept it. Or, ask if the lender will accept it when the property is a short sale. I tell them … write your highest and best offer and we will see what we can do with it. Typically … those agents don’t write … they are simply too lazy to put in the time.
I am with you Phil. I hate verbal offers! I recently told a new agent that she had to write it up and she was so clueless it was dangerous. She said "just tell the seller the number." I replied okay, and what is the type of lending, how much down, any inspections? She said the buyers just wanted to run the number past the seller. She did not understand that TERMS are also important!
Oh and that written offer never did show up
J. Philip,
I have been sitting here rewriting my response for 10 minutes and I am now giving up. I can't seem to say anything nice about these types of phone calls. They are a waste of time to a listing agent. I am obligated to take EVERY offer back to my clients, but a verbal offer is tenuous at best. If its not on paper, I can't accurately convey it to my clients.
-Brent
I get the rare verbal offer and always pass it on to the seller after asking the buyer agent to send over the offer in writing. Verbal offers are just a buyer's fishing expedition and are usually very low, with no intention of ever writing a real offer. As a side note, I can not imagine working under the New York system! We get inspections done, transaction closed and the buyers moved in to their homes within two weeks sometimes!
The practice in the Chicago and suburban area is for all offers to be presented on written contracts provided by the local MLS boards. However, it is common practice to present counteroffers verbally...and they are binding. When final terms are reached, the original contract is amended with changes from the original offer initialed by both buyer and seller. The contract is considered "fully executed" when all initials and signatures have been completed and a copy of the signed contract is delivered to both the buyer and seller. These contracts with cross outs and amendments are often very difficult to read....but they sure beat a verbal offer with nothing in writing to present to the seller!
I don't mind verbal offers over the phone as long as I am able to communicate between my client and the other agent quickly.....once done...then go to paper...really depends on the skill level of the agent on the other end of the deal and if they communicat with their clients well...
Being that I'm the 52nd comment there probably isn't much more that can be said. Please forgive me if I'm repetitive. I suppose I'm in agreement with the gentleman before me. I don't mind a verbal offer but I always caution the agent that it has no legal bearing and if they're serious, they need to be prepared to put something in writing. I think in a way, it doesn't do our Sellers justice to fully disregard an offer just because its not written. Now if we, as the listing agents, put all our eggs in the one basket that is the verbal offer then we are not working in the best interests of our clients and clearly not professional.
Hi Phil -- After reading your first sentence...are you saying inspections are done before an purchase agreement is reached? Just curious how it works there in NY.
All great points made here today. I enjoyed the read. I've had this happen now and again and always tell them unless it's written, with terms, etc. and signed then is means nothing. Get me the offer in writing and I'll see what I can do for your buyer.
Patricia/Seacoast NH & ME
I prefer to have everything in writing. Maybe it's the attorney in me, but it's the only way that it really makes sense.
Great post! I completely agree. It is our job and it definitely needs to be in writing!
Is there really a such thing as a serious buyer with a verbal offer?