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Want to buy it? Then get serious.

By Bryant Tutas

Real Estate Broker/Owner with Tutas Towne Realty, Inc and Garden Views Realty, LLC BK607690

March 12, 2007 09:28 AM

I had a request from Renee Burrows, earlier this week, to write a post on what Buyers and their REALTORS® can do to make their offers more appealing to my Sellers. As, primarily a listing Broker, I can assure you it's not always about the price. So what do I look for in an offer? What can a REALTOR® do to ensure that their Buyer's offer is taken seriously? A purchase offer, just like most things, is all about the presentation. If you want it to be taken seriously then present it seriously. So here are some tips:

It must be in writing. Now folks to me this is a big one. My standard response, to a verbal offer, is: "Is the offer so bad you won't even take the time to put it in writing? My Seller will NOT negotiate a verbal offer, it is a condition of my listing agreement." NEXT!

Send me the ENTIRE purchase offer with ALL addendums. Also, I need a copy of the escrow check and a LENDER letter.

Make sure the offer is legible with NO blank spaces. If your handwriting is bad then type it. If I can't read it, I can't present it. I do not get paid to decipher offers.

After you have faxed or E-mailed the offer. Pick up the phone and make sure I received it. I had this happen last week. A REALTOR® called me on Friday to ask if I had a response on the offer she sent over on Wednesday. "Nope, never got it" She had faxed it to the wrong number.

Please, please, please put a cover letter with your offer. And please, please, please make sure your contact information can be read. It may be your only Buyer and your only offer but I can assure you it's not my only offer. I can't respond if I don't know where it came from.

Make sure the figures add up correctly and the dates for contingencies are correct i.e. A 100% financing deal with a pre-approval for 95% financing. Huh? A 21 day closing date with 30 days for mortgage approval. What? An inspection period longer than the closing period. Hello?

Now folks, this is pretty basic stuff but it happens ALL the time. These offers will rarely be accepted. If you don't take your offers serious neither will my Sellers.

OK, now lets assume you have the basics down. Here are some things you can show me, to really get me excited.

A pre-approval letter from a known Lender. Not ABC we loan money cheap.

A letter from the Buyer telling my Sellers how much they love the house and how much they are looking forward to their new home. This is an excellent tool to give Sellers that have lived in their home for a long time. They want someone that will enjoy and take care of "their" home.

The Buyer's credit score. I will love you for this one. If they have great credit, then prove it to me. I won't even show the Sellers. But it sure does make me warm and fuzzy.

Proof of funds. Paying cash? Have a 20% down payment? Prove it to me. I'm going to ask anyway, so you might as well beat me to the punch. By the way, cash does not mean, "when we sell our house." Cash means AVAILABLE funds in the bank.

Oh, one more thing, communicate with me. Return your phone calls promptly. If it takes me three days to reach you, while we are negotiating, I will have zero motivation to want to do a 30-45 day transaction process with you. I will tell my Sellers this AND they will agree with me.

So there you go Renee, hope this helps. Any other suggestions from listing Brokers?

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Ken Stampe

iBrandPlan.com - Grow your e-Profile & Brand - Dallas, TX

iBrandPlan

As a mortgage professional I was very interested to see that most of your "Advanced" points are financing related. I was curious if a buyer's agent is permitted to share credit score with the listing agent? I suppose if the buyer permits it, so be it, but as a lender I wouldn't give that information to even the buyer's agent. I can share information with the client but not with anyone else, and the bank's policy is firm on that point within our privacy restrictions. With increased restrictions on privacy and information sharing I wonder what else can be done to make my buyer's agent more capable of giving you what will turn into the "winning" offer?

One issue may be the pre-approval letters you are seeing are woefully inadequate. The State of Texas requires the use of either a pre-qualification or pre-approval form. For samples see pre-qualification form or pre-approval form. I wouldn't accept a pre-qualification form if I was a listing agent as it doesn't have enough information behind the approval. You may want to provide these forms back to the mortgage loan officer you get a "pre-qualification" letter from as a standard of what your seller will accept for "pre-approval".

I can understand your desire to review offers only from capable buyers and to select from competing offers one that is most likely to close. That's why you are a great listing agent!

Great post....

Ken Stampe - Bank of America Mortgage Lending

Mar 13, 2007 04:54 AM

Bryant Tutas

Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL

Selling Florida one home at a time

Mikey, I actually work with several investors right now and ALL are buying. It's really not so much timing as doing your homework. And it depends on why you are buying. In Stan's case it will be for a primary resident and for a long period of time. If someone is wanting to buy, who knows they will be moving in 3 years, then I agree, rent, don't purchase. To risky.

My statement "the sideline is for rookies" was a little too cocky. But it does have some merit behind it. For a true investor, that does their homework, this is a much better time to buy than it was 2-3 years ago. I never quite understand why folks buy when it's a sellers market. They wouldn't do that in any other investment market. With the amount of foreclosures, desperate sellers, short sales and inventory on the market, right now is a great time to invest in RE. In my opinion.

Mar 13, 2007 04:56 AM

Bryant Tutas

Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL

Selling Florida one home at a time

Ken, I actually have a form that I can make as part of the contract that authorizes the LO to release financial info related to the buyer to me. This form is signed by the buyer. I've only used it a couple of times as most buyers have no issue with providing info if asked. But yes you must have permission from the buyer. I like the idea of a standard form.

Mar 13, 2007 05:05 AM

Ken Stampe

iBrandPlan.com - Grow your e-Profile & Brand - Dallas, TX

iBrandPlan

If the buyer wants to tell you, then that's their prerogative. However, the bank simply wouldn't allow us to share this information even with a release form. One thing I do like about the way the bank does pre-approvals is that they are issued directly from the underwriter. A loan officer in our company doesn't have the authority to issue a pre-approval. This helps a lot because I tell my clients it's more than just taking the application and pulling up a credit report. If the property seller wants to see a pre-approval and not a pre-qualification then you need to get me some additional information before you go shopping for a home. This also works to speed up the loan process after the buyer enters into a contract.

Mar 13, 2007 05:14 AM

Dennis Serra

Meridian Business Group - Schaumburg, IL

"The Buyer's credit score. I will love you for this one. If they have great credit, then prove it to me. I won't even show the Sellers. But it sure does make me warm and fuzzy."

Credit score alone is no indication of their ability to buy a house. Why do RE agents believe knowing the FICO score of the buyer gives them more insight to a buyers financial ability to buy a house then a full application, and accompying docs, taken and reveiwed by a mortgage professional?

It is the equivalent of taking the value from Zillow.com as a true appraisal.

Mar 13, 2007 05:19 AM

Bryant Tutas

Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL

Selling Florida one home at a time

Ken, will you move to Florida?

Dennis, If I get a pre-approval from the LO I should be safe to assume they have verified employment debt ratios etc.....the credit score will tell me if they are lying to me or not. It IS NOT all inclusive but it is a very important indicator for me if they are submitting an offer with 100% financing and they have a score of 582. If this is the case, I need more info before my seller makes a decision. If someone has a score of 725, it is an excellent indicator that these folks know how to handle their finances. So knowing the FICO score gives me tremendous insight into the financial situation of the buyer. To compare it with a value from Zillow is just not even close to being the case.

Mar 13, 2007 05:30 AM

Tony and Suzanne Marriott, Associate Brokers

Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ

Haven Express @ Keller Williams Arizona Realty

Bryant - Thanks for the concise list - I'm going to compare it with our current "What our Seller is Looking for in an Offer" list and integrate/modify it into Arizona-ese.

Mar 13, 2007 06:23 AM

Brian Papaccio

Wells Fargo Home Loans - Newark, DE

Ken I am with you on that. I am not a huge company like BoA. But if a real estate agent calls, listing or selling. I don't care what they have in writing from who. I will give you general information pertenant to the transaction only. I tell the borrower ahead of time what information is commonly requested by a listing agent, why they are looking for that information, etc. And I tell them to watch out about providing too much information that may cause them to be discriminated against financially. I have had borrowers loose deals because the listing agent requested credit info. The bid was a little higher but they were deemed "subprime" so the other offer won. This was more than a year ago, now I would understand those concerns, but a year ago... their money is still green.

Mar 13, 2007 07:38 AM

George Tallabas

RE/MAX Advantage - Nampa, ID

Idaho Real Estate

Thanks Bryant, I have done everything on your list except provide the seller with a copy of the credit report. The reason for this is that I get all my buyers approved by a quality mortgage lender before I write the offer. Since my buyers are approved there is not reason to provide this to the seller or his/her Realtor. Also, this is very private information and I would recommend receiving written permission from the buyer to present this to a seller. Great post and thanks for sharing.

Mar 13, 2007 07:45 AM

Anonymous

Stan

Mikey,

What wasn't clear? I've always been BRUTALLY honest and upfront about my plan of action. Buy; but buy right.....

Buying a house, for me, is a lifestyle choice. I know a lot of people look at a house as an "investment", but that's not where I put my money......to make money. However, I'd be an idiot not to take advantage of the market and insure a return.

I have an old saying: In confusion, there is profit. And the housing market is pretty "confused" right now. :)

Mar 13, 2007 09:14 AM

#77

Irene Potter

ZipRealty Residential Brokerage - Maple Valley, WA

Creating moving experiences in real estate

Having been on both sides of the table, I am so close on this list. However, even with all the stuff, save for the FICO and the financial statement, my clients still didn't get the house because it was a newbie listing agent this week-ARRGH! My clients had a substantial (almost 9% downpayment) and a BOA letter, too! The newbie listing agent rejected my offer by email and only after I left a message to get an update.

However, my other client just got their house, despite an 11th hour competing offer because the listing agent said she likes smart agents, making me very happy :-) They didn't even look at the other offer!!

Love letters are terrific in multiple offer situations but lose their effectiveness if they are produced by the agent instead of the family. I can tell the difference between them. They are a nice touch for touchy feelys but it's tough to get those past analytical types (or get them to write them.)

Great topic. Bet you helped a lot of folks today.

Mar 13, 2007 01:41 PM

Melissa Kruse

Gryphon - Lewis Center, OH

Missed this post earlier but have add one more suggestion. When sending an offer to a seller's agent. Send the entire offer at once. Do not send the even pages in one fax and the odd pages in another and expect us to figure it out.

Mar 15, 2007 12:39 AM

Ava Anderson

A-Z Atlanta Realty - Snellville, GA

Selling Atlanta from A-Z!

BB:

Thanks for write this blog. I have book-marked it for future use.

Mar 16, 2007 04:17 AM

Irene Potter

ZipRealty Residential Brokerage - Maple Valley, WA

Creating moving experiences in real estate

Melissa: Who the heck faxes odds and evens? Does your MLS have 2 sided purchase and sales?

Mar 18, 2007 11:07 AM

Melissa Kruse

Gryphon - Lewis Center, OH

Irene - Seriously - we got an offer in the other day that 2 faxes - odds and evens. When we got the first fax, we called to let the agent know that there must be a problem, we had only gotten some of the pages. Their response was that those were the odd pages and we would get the even pages in the next fax and to just put them together. We use our MLS's computer generated contracts so they are all one sided. There might be some 2 sided forms out there but you would think that the agent would make copies of the one side and put it all together in one fax. It was really strange.

Mar 18, 2007 11:23 AM

Maggie Dokic /Indialantic | 321-252-8696

Magdalena Dokic - Indialantic, FL

Selling the beach in Florida's space coast

Your post has been included in the week in review.

Mar 19, 2007 02:25 AM

Amber Steiner

Solid Source Realty - Cumming, GA

North Atlanta Real Estate

What a great topic! I am bookmarking this for future reference and reading.

Mar 20, 2007 07:55 PM

Debbie Cook

Long & Foster Real Estate, Inc - Silver Spring, MD

Silver Spring and Takoma Park Maryland Real Estate

I think you have all bases covered from a listing agents point of view. I agree with all that you require from a selling agent. I might add that until you have everything you want from them, your seller will not consider accepting a contract without it. They might look at it, but won't accept it.

Mar 24, 2007 07:54 AM

Loreena and Michael Yeo

3:16 team REALTY ~ Locally-owned Prosper TX Real Estate Co. - Prosper, TX

Real Estate Agents

Bryant: I am on a roll with your blogs today. You share so much information. You had mentioned once on your blog about You dont know why you get featured - and featured often. I'll tell you: You write the most informative blogs out there. I learnt so much from your writings. You are far too humble.....

Jun 04, 2007 07:38 AM

Bryant Tutas

Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL

Selling Florida one home at a time

Loreena, I did notice you are on a "Broker Bryant" reading frenzie. Thank you. I hope it helps give you some ideas for your business. That's why I write.

Jun 04, 2007 08:45 AM

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