THE PATHWAY TO BUYING
WRITING OFFERS
When we find a property you’re serious about I will write an offer on your behalf. The first offer we write I will walk you though The Residential Real Estate Agreement (in Oregon) and talk about major clauses and ramifications.
When the document is ready, I will send it to you for electronic signature. I use DocuSign.
Structuring The Offer
In his excellent book Never Split the Difference, Chris Voss discusses what’s important to the person you’re negotiating against. Although price is often the most important thing to the seller, that’s not always the case. My job is to find out what that is and see if we can make our offer the most attractive to them, even if it’s not the highest. The most common things besides the price include:
Closing Time: The Seller might value a quicker-than-average close time. Many lenders offer relatively fast close times compared to years ago.
Cash Offer: Sellers like this because they don’t have to worry about the appraisal process and can often close in days instead of weeks.
Reducing Contingencies: For example, you can shorten the inspection period from 10 days to 5. Some lenders will waive an appraisal if the home meets specific criteria.
Removing Contingencies: This is rare, and you should only do so after understanding all of the implications, but it can be powerful.
Tell me more about removing contingencies. (click for answer)
Think like a seller. One of their biggest fears is accepting your offer and only being asked for potentially tens of thousands of dollars in concessions. Property investors often use this tactic. The reason is simple. Suppose they are a contractor themselves or highly experienced in common home problems. In that case, they can walk the property (sometimes with construction pros) and have a high degree of certainty of its condition without needing the regular 2-3 hours to crawl through the house. But the truth is they are assuming a higher level of risk than other options — caveat emptor.
I would say if you can match that level of expertise (or you have people who can) and you are fully informed of the risks, a lower offer can seem a lot more attractive to a seller. However, this isn’t a golden bullet. If you make an offer substantially below market value, the offer is still likely to get rejected.