In the last chapter we learned how to fill out the eight page deposit receipt. When the deposit receipt is signed by the buyers, we call this an offer to purchase.
OFFER TO PURCHASE 1. Obtaining the listing (selling the owner on the listing). 2. Finding a buyer who wants the property (selling the buyer to make an offer). 3. Obtaining an acceptance from the seller (selling the seller on an acceptance).
To earn a commission you must complete all three.
<ul><li>SUBMIT THE OFFER </li></ul><ul><li>The appointment. </li></ul><ul><li>Estimate the seller’s proceeds. </li></ul><ul><li>Estimate the buyer’s costs. </li></ul>
THE APPOINTMENT It is the listing agent’s responsibility to arrange the appointment to make the offer. Either agent can present the offer. It is strongly suggested the selling agent make the presentation. Sometimes the listing agent will want to make the offer, this is not suggested. DO NOT GIVE THE LISTING AGENT ANY DETAILS OF THE OFFER.
Never present the offer over the phone. Owner can’t accept an offer over the phone.
CMA COMPARATIVE MARKET ANALYSIS When the listing was taken the seller should have been given at least three comparative market analysis. If the listing is around six months old or older you might want to present a CMA.
PRESENTING THE OFFER 1. Multiple Offers. 2. Setting the Mood. 3. Stages of the Presentation. 4. History of the Sale. 5. About the Buyers.
MULTIPLE OFFERS In a good market, many times a home will have multiple offers. It is the listing agent’s job to present these offers in an impartial manner.
SETTING THE MOOD To set the mood, mention some features that played a part in the sale and that you know the owner takes pride in.
STAGES OF THE PRESENTATION One type of presentation is a three stage plan: 1. History of the property sales effort and any problems with the property. 2. Information about the buyers. Make the buyers appear to be people whom the sellers would like. The buyer should not be portrayed as trying to take advantage of the seller. 3. The offer.
HISTORY OF THE SALE The length of period on the market (in days). Previous listing or sale efforts. Advertising. The role of the MLS.
The role of the MLS. Internet postings. Open houses. Showings. Responses to showings. Any other offer(s).
ABOUT THE BUYER Paint a verbal picture of the buyers that will make the sellers feel they are likable people who will appreciate the home. Keep in mind that home sales are emotional, both to the buyer and seller.
THE OFFER At the time of making the offer or included in the offer, the following should be agreed upon.
<ul><li> Occupancy date. </li></ul><ul><li> What stays or goes with the house. </li></ul><ul><li> Seller will prepare a transfer disclosure statement. </li></ul><ul><li> Name of escrow and if costs are to be split. </li></ul><ul><li> Prorating of taxes. </li></ul><ul><li>Keys to be turned over. </li></ul>Some examples are:
JUSTIFY THE OFFER When the offer is less than the listing price, you must be able to justify the offer. The seller should realize they are in competition with other sellers.
Sellers have three choices: 1. Acceptance. 2. Rejection. 3. Counteroffer. AGENT RECOMMENDATIONS
It is unethical for a seller’s agent to recommend to the owners that an offer be accepted if the agent does not feel that the offer is in the best interest of owners. ACCEPTANCE
REJECTION The two major seller objections are: Price Terms
THE COUNTEROFFER If an agent can get the buyer to make a full price, all cash offer, there is no need for a counteroffer. Usually the buyer will want to make an offer that is not full price or does not meet the terms of what the seller wants.
The seller can make a counteroffer. The seller should understand that the counteroffer rejects the original offer and gives the buyers an out. Once an offer is rejected, the owners have lost their right to accept and form a contract. The offer is dead.
The buyer then can make a counteroffer to the seller’s counteroffer. Counteroffers can continue until the seller will accept one, or the seller or buyer stops or rejects the offer.
THE ACCEPTANCE Acceptance of an offer must be unqualified. An acceptance does not take place until the person making the offer is notified of the acceptance. It is recommended that you deliver the acceptance to the buyers immediately on receiving it.
Once the offer has been accepted the transaction is ready to go to escrow. READY TO GO TO ESCROW