This weekend I received a text from a friend whose Tallahassee home I recently sold. She plans to place an offer on a home in TX this weekend and wanted to know the binder amount that she should place on the home. Literally, the text states that the list price is $350,000. She plans to make an offer of $300,000, and how much binder should she offer? Unfortunately, it’s far more complicated than a numeric reply with the “send” button.
There are Five Parts to A Well-Written Real Estate Offer
- Purchase Price- Perhaps the most important component of an offer is the purchase price. It’s true that sellers look first at the purchase price and quickly make a judgment about the vitality of the offer, but competent agents discuss all the facets of an offer.
- Closing Date- How much longer does the seller need to pay for the property before the buyer will assume the liability?
- Property Condition- Is the buyer willing to purchase the property “as is” with an inspection or do they plan to ask the seller to make many repairs to the home to make it move in ready?
- Financing Terms- Is the buyer asking the seller to owner-finance part of the sale or will the seller receive full payment at closing?
- Binder Amount- Is the buyer placing a strong binder noting that they are serious about the property and qualified to close on the home, or is the binder weak, thereby making the seller anxious about the buyer’s financial situation and ability to close on the property?
Your Real Estate Offer is Like a Deck of Cards
It is likely that one of your five components is weak and possible that you may have several weak components. Therefore, it’s important that you have at least one “ace in the hole”, a “three of a kind”, or some combination that compels the seller to take your offer even though the seller was hoping for more money, a quicker closing date, a stronger binder, etc. Give the seller something to get excited about, and the seller may be more forgiving on the weaker parts of your offer.
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I agree with this post fully! Having strong components can offset a lower offer on the selling price…I have at times used this tactic successfully to ink a better deal.
Five parts to a well written real estate offer is bang on. I would just like to add that a buyer should maintain the idea of a win-win situation. Try to give the seller what he needs.