Offer for a house

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nydoc
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Offer for a house

Post by nydoc » Sun Jan 12, 2020 9:44 pm

Hi,
We gave a purchase price offer for a house. Due to some weird circumstances seller’s agent will also be buyer’s agent for this house. Agent states that I have to sign a sell agreement to be able to present the offer to the owner. This agreement is almost like a full contract with no contingencies and requires me to put 10% deposit if seller accepts the offer. I told the agent that I am not comfortable signing anything just for an offer. Initially she tried to downplay the importance of the document then wanted to know what contingencies I would like to include. I told her my attorney will take care of it.
Now I am very suspicious of this dual agent. I am almost not interested in this house anymore because of this.
Is this type of document signing normal for a house offer? I always thought offer is just like a verbal offer with a preapproval letter.
Thank you.

manatee2005
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Re: Offer for a house

Post by manatee2005 » Sun Jan 12, 2020 9:50 pm

What are the weird circumstances that made the sellers agent also buyers (Yours) agent?

Topic Author
nydoc
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Re: Offer for a house

Post by nydoc » Sun Jan 12, 2020 9:53 pm

Weird circumstance- buyer’s agent not able to reach for the showing and I saw the house with the seller’s agent. In any case I don’t have very high respect for buyer’s or seller’s agent and their business model so I didn’t care much. I think attorney will be the one truly representing me and I can pay commiserate to that.

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galving
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Re: Offer for a house

Post by galving » Sun Jan 12, 2020 9:56 pm

Absolutely avoid the dual agent.
There's an inherent conflict of interest.
The agent cannot both serve the best interests of the Buyer and Seller simultaneously.

Expect major static from your 'agent' when you convey this message.
Keep in mind that their interest is a closed sale (at whatever price) because they'll keep 6%.

Mr. Rumples
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Re: Offer for a house

Post by Mr. Rumples » Sun Jan 12, 2020 9:57 pm

If you think your attorney is the only one who will represent you, that's your answer and you are right. (I still recall and it was decades ago, my attorney yelling at me about signing a contract on our first home. Our families went back generations so I knew he was looking out for me, but still surprised nonetheless at being yelled out...fortunately, it all worked out, but the point is you need someone on your side.)

Compared to the cost of a house, asking an attorney about it is small potatoes, but my guess is the attorney will rip what the agent wants to shreds as not being in your interest.
Last edited by Mr. Rumples on Sun Jan 12, 2020 10:03 pm, edited 1 time in total.

Topic Author
nydoc
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Re: Offer for a house

Post by nydoc » Sun Jan 12, 2020 10:02 pm

I actually told my agent to present the offer for the house I saw myself. I have no sympathy for realtors and their ilk. They can sort it out among themselves.

manatee2005
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Re: Offer for a house

Post by manatee2005 » Sun Jan 12, 2020 10:05 pm

That is not that weird actually, happens all the time. Just because the sellers agent showed you the house it doesn’t mean that he represents you now as a buyers agent.

We’re you looking for houses with the buyers agent for a long time? If you did and then dumped him to just use your attorney, he might sue you for his 2.5% commission. Put yourself in his shoes.

Seller’s agent seems slimy.

mortfree
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Re: Offer for a house

Post by mortfree » Sun Jan 12, 2020 10:09 pm

Who have you signed an agreement with, if anyone?

Your buyers agent?
Your attorney?

It sounds like you haven’t signed anything with the sellers agent so that shouldn’t be an issue.

I would direct all conversation with the sellers agent to attorney or buyers agent (if you have a signed agreement).

Laws vary and I am not an expert by any means.

Topic Author
nydoc
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Re: Offer for a house

Post by nydoc » Sun Jan 12, 2020 10:11 pm

My agent is a Redfin agent and they don’t ask you to sign any agreement. Even then I informed my agent about the house and offer but the seller’s agent wants to just communicate with me. And yes this seller’s agent appears a bit shady. This house is in the market for the past 6 months and now they want to finish all paperwork in 6 hrs.

Bobby206
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Re: Offer for a house

Post by Bobby206 » Sun Jan 12, 2020 10:13 pm

nydoc wrote:
Sun Jan 12, 2020 10:11 pm
My agent is a Redfin agent and they don’t ask you to sign any agreement. Even then I informed my agent about the house and offer but the seller’s agent wants to just communicate with me. And yes this seller’s agent appears a bit shady. This house is in the market for the past 6 months and now they want to finish all paperwork in 6 hrs.
Forget that Realtor. Just have your attorney review and prepare the offer. Then you know you are represented.

Topic Author
nydoc
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Re: Offer for a house

Post by nydoc » Sun Jan 12, 2020 10:17 pm

Earlier I put an offer for another house which was not accepted which didn’t require any paperwork except the preapproval letter. That’s why this one appears suspicious.
Last edited by nydoc on Sun Jan 12, 2020 10:18 pm, edited 1 time in total.

ARoseByAnyOtherName
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Re: Offer for a house

Post by ARoseByAnyOtherName » Sun Jan 12, 2020 10:17 pm

nydoc wrote:
Sun Jan 12, 2020 10:11 pm
And yes this seller’s agent appears a bit shady. This house is in the market for the past 6 months and now they want to finish all paperwork in 6 hrs.
Because they’re trying to rip you off somehow.

Carefreeap
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Re: Offer for a house

Post by Carefreeap » Sun Jan 12, 2020 10:26 pm

nydoc wrote:
Sun Jan 12, 2020 9:44 pm
Hi,
We gave a purchase price offer for a house. Due to some weird circumstances seller’s agent will also be buyer’s agent for this house. Agent states that I have to sign a sell agreement to be able to present the offer to the owner. This agreement is almost like a full contract with no contingencies and requires me to put 10% deposit if seller accepts the offer. I told the agent that I am not comfortable signing anything just for an offer. Initially she tried to downplay the importance of the document then wanted to know what contingencies I would like to include. I told her my attorney will take care of it.
Now I am very suspicious of this dual agent. I am almost not interested in this house anymore because of this.
Is this type of document signing normal for a house offer? I always thought offer is just like a verbal offer with a preapproval letter.
Thank you.
I'm not sure about the vocabulary you are using so you may be saying the same thing I would.

Typically in order to present an offer, the offer MUST be in writing. Different states call it different things. In my state (CA) it's called a Purchase Contract and yes, it's a contract. For sure you want your attorney to review the contract before signing and especially if there's a dual agency.

I've been an agent and I don't like dual agency in general. Even when I was selling my own home I felt better having another agent represent a buyer because there's no way they are getting the proper representation. For a short term win on a reduction of commission it's not worth the legal risk if some bad thing happens down the road.

For your first home you should do some reading like Homebuying for Dummies. Not saying you are but a little homework goes a long ways for one of the most expensive purchases of your life.

And yes, there are good agents out there. Your colleagues will have some recommendations. Don't treat agents like they're stupid. Being arrogant will ensure you get ripped off.

Good luck.

Topic Author
nydoc
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Re: Offer for a house

Post by nydoc » Sun Jan 12, 2020 10:34 pm

Thanks for your detailed response. I just felt rushed about this offer letter. In agent’s words-“This isn’t a contract . It’s just an offer. I can’t give offer without your signature.”
She sent it by email and texted me to just sign it and send it back.
Although I am not a fan of this business model, I do believe if I have my own agent they should be paid for their work.

mortfree
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Re: Offer for a house

Post by mortfree » Sun Jan 12, 2020 11:05 pm

Realtor tactic: Create a sense of urgency and loss.

Watch out for the games.

petulant
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Re: Offer for a house

Post by petulant » Sun Jan 12, 2020 11:10 pm

Carefreeap wrote:
Sun Jan 12, 2020 10:26 pm
nydoc wrote:
Sun Jan 12, 2020 9:44 pm
Hi,
We gave a purchase price offer for a house. Due to some weird circumstances seller’s agent will also be buyer’s agent for this house. Agent states that I have to sign a sell agreement to be able to present the offer to the owner. This agreement is almost like a full contract with no contingencies and requires me to put 10% deposit if seller accepts the offer. I told the agent that I am not comfortable signing anything just for an offer. Initially she tried to downplay the importance of the document then wanted to know what contingencies I would like to include. I told her my attorney will take care of it.
Now I am very suspicious of this dual agent. I am almost not interested in this house anymore because of this.
Is this type of document signing normal for a house offer? I always thought offer is just like a verbal offer with a preapproval letter.
Thank you.
I'm not sure about the vocabulary you are using so you may be saying the same thing I would.

Typically in order to present an offer, the offer MUST be in writing. Different states call it different things. In my state (CA) it's called a Purchase Contract and yes, it's a contract. For sure you want your attorney to review the contract before signing and especially if there's a dual agency.

I've been an agent and I don't like dual agency in general. Even when I was selling my own home I felt better having another agent represent a buyer because there's no way they are getting the proper representation. For a short term win on a reduction of commission it's not worth the legal risk if some bad thing happens down the road.

For your first home you should do some reading like Homebuying for Dummies. Not saying you are but a little homework goes a long ways for one of the most expensive purchases of your life.

And yes, there are good agents out there. Your colleagues will have some recommendations. Don't treat agents like they're stupid. Being arrogant will ensure you get ripped off.

Good luck.
100% correct. An offer must be in writing. The modern way to do that is to use an electronic signature service like DocuSign or similar. I have had a couple real estate transactions in the last couple years and both used this system.

It is also completely legitimate for a real estate agent who is going to do anything for you to require a contract be signed.

A deposit of 10% is significant but may be an ideal amount of earnest money to show seriousness to close the transaction. The common practice for smaller homes around here is $1,000. 10% is certainly negotiable.

bjames310
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Re: Offer for a house

Post by bjames310 » Sun Jan 12, 2020 11:35 pm

nydoc wrote:
Sun Jan 12, 2020 9:44 pm
Hi,
We gave a purchase price offer for a house. Due to some weird circumstances seller’s agent will also be buyer’s agent for this house. Agent states that I have to sign a sell agreement to be able to present the offer to the owner. This agreement is almost like a full contract with no contingencies and requires me to put 10% deposit if seller accepts the offer. I told the agent that I am not comfortable signing anything just for an offer. Initially she tried to downplay the importance of the document then wanted to know what contingencies I would like to include. I told her my attorney will take care of it.
Now I am very suspicious of this dual agent. I am almost not interested in this house anymore because of this.
Is this type of document signing normal for a house offer? I always thought offer is just like a verbal offer with a preapproval letter.
Thank you.
I made the dual agent mistake in the past. Such a terrible move. Bet you can’t find anyone (but the dual agent) who recommends doing this.

Carefreeap
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Re: Offer for a house

Post by Carefreeap » Mon Jan 13, 2020 10:45 am

bjames310 wrote:
Sun Jan 12, 2020 11:35 pm
nydoc wrote:
Sun Jan 12, 2020 9:44 pm
Hi,
We gave a purchase price offer for a house. Due to some weird circumstances seller’s agent will also be buyer’s agent for this house. Agent states that I have to sign a sell agreement to be able to present the offer to the owner. This agreement is almost like a full contract with no contingencies and requires me to put 10% deposit if seller accepts the offer. I told the agent that I am not comfortable signing anything just for an offer. Initially she tried to downplay the importance of the document then wanted to know what contingencies I would like to include. I told her my attorney will take care of it.
Now I am very suspicious of this dual agent. I am almost not interested in this house anymore because of this.
Is this type of document signing normal for a house offer? I always thought offer is just like a verbal offer with a preapproval letter.
Thank you.
I made the dual agent mistake in the past. Such a terrible move. Bet you can’t find anyone (but the dual agent) who recommends doing this.
There are time when it's appropriate but it's rare. A highly sophisticated buyer or seller (for a pocket listing). Also very unique properties that require a lot transaction work (special permitting, zoning, et cetera).

And of course, there are those rare agents who actually make a transaction MORE difficult by causing drama and complications all the while claiming they are working on behalf of their client. :oops:

Many buyers will create their own problems too by deliberately going around a selling agent directly to the seller's agent figuring they can save some $$$.

It takes all kinds!

adamthesmythe
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Re: Offer for a house

Post by adamthesmythe » Mon Jan 13, 2020 11:00 am

nydoc wrote:
Sun Jan 12, 2020 10:17 pm
Earlier I put an offer for another house which was not accepted which didn’t require any paperwork except the preapproval letter. That’s why this one appears suspicious.
No, both were suspicious. Because no offer is real without a signature (and a check).

I am concerned that OP is not very clear on the process. This will be particularly dangerous with a pushy agent supposedly representing both sides.

I recommend OP take a step back and learn the details of the purchase process in his state (because...they are all different). Having a buyer's agent can be a very good idea for a first purchase by an inexperienced buyer.

Carefreeap
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Re: Offer for a house

Post by Carefreeap » Mon Jan 13, 2020 11:02 am

mortfree wrote:
Sun Jan 12, 2020 11:05 pm
Realtor tactic: Create a sense of urgency and loss.

Watch out for the games.
Legally, most contracts contain the language "Time is of the essence". Therefore agents are legally bound to present offers as soon as possible. All kinds of things can happen and until you're in the business you would believe this stuff is made up.

Two transactions come immediately to mind. One was when I was showing houses to a relatively wealthy businessman who had just sold a building in downtown San Diego. This was back in the early 80s when things were relatively slow (remember those 17% interest rates?). He liked one of the properties and wanted to "think it over". Two days later he called me to say he was ready to make an offer. I had to inform him that the property was already under contract. He told me that he was mad at me for not "making him" write an offer. :oops:

Second was a situation whereby I had a listing that was nearing the 30 day mark of being on the market. While I always tried to price the properties competitively, sometimes a client would insist on a higher price and I would take the listing with the understanding that if there were no offers after 30 days it was time for a price reduction.

I had a colleague (not the same agency) who said he had a buyer. This went on for a couple of weeks with no offer forthcoming. He was a nice guy but kind of a talker. I got a call from an agent I had never worked with who said he wanted to present an offer that evening. We set up an appointment with the seller. In the meantime I ran into the "talker" agent and said I had an offer coming in that evening. I told him if his buyer was really serious the agent needed to write it up and be there at the appointment. I didn't hear anything further but the agent did show up for the appointment. At the appointment both agents presented their offers. The talker agent's offer was slightly higher but the buyer was a first time buyer buying FHA with the minimum 5% down. The other offer had 20 or 25% down. My seller took the lower offer with the higher down payment. After the presentation the other agent told me that if his buyer hadn't gotten the house he would have reported me to the Board of Realtors for not disclosing a second offer! I advised him of the situation and that I thought the other agent was just blowing smoke. He seemed to accept that there was nothing nefarious but I hope you see why sometimes you can't win no matter what one chooses!

FoolMeOnce
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Re: Offer for a house

Post by FoolMeOnce » Mon Jan 13, 2020 11:09 am

I don't understand the problem. Make an offer through your Redfin agent. Don't sign anything your Redfin agent doesn't ask you to sign. Forward all correspondence from the seller's agent to your Redfin agent, let the Redfin agent communicate back to the seller's agent.

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RickBoglehead
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Re: Offer for a house

Post by RickBoglehead » Mon Jan 13, 2020 11:12 am

adamthesmythe wrote:
Mon Jan 13, 2020 11:00 am
nydoc wrote:
Sun Jan 12, 2020 10:17 pm
Earlier I put an offer for another house which was not accepted which didn’t require any paperwork except the preapproval letter. That’s why this one appears suspicious.
No, both were suspicious. Because no offer is real without a signature (and a check).

I am concerned that OP is not very clear on the process. This will be particularly dangerous with a pushy agent supposedly representing both sides.

I recommend OP take a step back and learn the details of the purchase process in his state (because...they are all different). Having a buyer's agent can be a very good idea for a first purchase by an inexperienced buyer.
This ^^^
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barnaclebob
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Re: Offer for a house

Post by barnaclebob » Mon Jan 13, 2020 11:17 am

In my area an offer is an enforceable contract but you are able to include whatever contingencies you want. Lawyers arent typically used for house purchases here either.

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Watty
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Re: Offer for a house

Post by Watty » Mon Jan 13, 2020 11:20 am

nydoc wrote:
Sun Jan 12, 2020 9:44 pm
Now I am very suspicious of this dual agent. I am almost not interested in this house anymore because of this.
This would also raise question in my mind about how accurate any disclosure documents are that the agent helped the seller fill out.
nydoc wrote:
Sun Jan 12, 2020 10:11 pm
This house is in the market for the past 6 months and now they want to finish all paperwork in 6 hrs.
Part of the rush may be that there was a six month listing agreement that is about to expire and the agent may be about to lose that listing.

FI4LIFE
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Re: Offer for a house

Post by FI4LIFE » Mon Jan 13, 2020 11:21 am

You need to have an understanding of the laws in your state. Some will require written offers, others will not. In some states, an offer is just opening the door to a discussion and can be withdrawn at any time, in other states there may be a deposit required that is subject to forfeit if you back out for no reason.

Find and pay for your own realtor who will represent your interest. If you have a trusted lawyer, you may decide to use the seller's agent but ask for a discount on the commission. A crummy lawyer is worse than a crummy realtor so make sure you have a good one.

nolesrule
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Re: Offer for a house

Post by nolesrule » Mon Jan 13, 2020 11:30 am

It may be different elsewhere, but when we purchased houses in 3 different states, we made verbal offers and the follow-up price negotiations. Once we came to an agreed upon price, the offer was formally put into writing and details were hammered out through attorneys. Same when we sold.

Unless it's a complicated offer or there are multiple buyers making offers I don't see the point of having an initial offer in writing that will then have to be updated after every step in price negotiation.

FoolMeOnce
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Re: Offer for a house

Post by FoolMeOnce » Mon Jan 13, 2020 11:33 am

I'll add to my comment above - both times I've bought property in Illinois, we submitted signed, written offers that became binding contracts upon acceptance. I presume that is the law here.

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Re: Offer for a house

Post by Jack FFR1846 » Mon Jan 13, 2020 11:44 am

Are you paying this agent to be a buyer's agent? If not, then they are not a buyer's agent, they are an agent simply showing you houses who will get his commission from the seller. If that's the case, his allegiance is to the seller, who will be paying him, not you. That is very common.

A typical offer will include contingencies for inspection and financing. When I bought my last house, there was also a contingency for me to sell my house. All of those should have definition of how you'd be able to get out of the contract to buy both in substance and timing. So you may have 1 month to do an inspection and the seller will have an obligation to allow an inspector and maybe you into the house to do an inspection. If you can't get financing, of course you want an out.
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RickBoglehead
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Re: Offer for a house

Post by RickBoglehead » Mon Jan 13, 2020 11:49 am

nolesrule wrote:
Mon Jan 13, 2020 11:30 am
It may be different elsewhere, but when we purchased houses in 3 different states, we made verbal offers and the follow-up price negotiations. Once we came to an agreed upon price, the offer was formally put into writing and details were hammered out through attorneys. Same when we sold.

Unless it's a complicated offer or there are multiple buyers making offers I don't see the point of having an initial offer in writing that will then have to be updated after every step in price negotiation.
That's how the realtors earn their money (or the lawyer(s) that buyers and sellers should hire).

I've gone 3 times back and forth on offers before an agreement was reached. Buyer submits offer, Seller makes changes, initials changes, and returns. Buyer either accepts by initialing changes and returns, or makes more changes, initials, and returns. And so on. Once the Seller accepts without making changes, there is a binding agreement subject to any contingencies included in the initial offer (home inspection, septic inspection, well test, radon test, ...).
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FoolMeOnce
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Re: Offer for a house

Post by FoolMeOnce » Mon Jan 13, 2020 11:54 am

RickBoglehead wrote:
Mon Jan 13, 2020 11:49 am
nolesrule wrote:
Mon Jan 13, 2020 11:30 am
It may be different elsewhere, but when we purchased houses in 3 different states, we made verbal offers and the follow-up price negotiations. Once we came to an agreed upon price, the offer was formally put into writing and details were hammered out through attorneys. Same when we sold.

Unless it's a complicated offer or there are multiple buyers making offers I don't see the point of having an initial offer in writing that will then have to be updated after every step in price negotiation.
That's how the realtors earn their money (or the lawyer(s) that buyers and sellers should hire).

I've gone 3 times back and forth on offers before an agreement was reached. Buyer submits offer, Seller makes changes, initials changes, and returns. Buyer either accepts by initialing changes and returns, or makes more changes, initials, and returns. And so on. Once the Seller accepts without making changes, there is a binding agreement subject to any contingencies included in the initial offer (home inspection, septic inspection, well test, radon test, ...).
And it is often all done electronically; not a hassle at all. Get an offer/counter sent to your phone, talk to your agent if necessary, sign on your phone, go on with your day.

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Re: Offer for a house

Post by adamthesmythe » Mon Jan 13, 2020 12:20 pm

nolesrule wrote:
Mon Jan 13, 2020 11:30 am
It may be different elsewhere, but when we purchased houses in 3 different states, we made verbal offers and the follow-up price negotiations. Once we came to an agreed upon price, the offer was formally put into writing and details were hammered out through attorneys. Same when we sold.

Unless it's a complicated offer or there are multiple buyers making offers I don't see the point of having an initial offer in writing that will then have to be updated after every step in price negotiation.
Interesting. It would amusing to have a spreadsheet laying out some of the customs/ procedures by state.

'Round where I live I have often heard the expression "write it up and we'll talk."

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Re: Offer for a house

Post by RickBoglehead » Mon Jan 13, 2020 12:34 pm

adamthesmythe wrote:
Mon Jan 13, 2020 12:20 pm
nolesrule wrote:
Mon Jan 13, 2020 11:30 am
It may be different elsewhere, but when we purchased houses in 3 different states, we made verbal offers and the follow-up price negotiations. Once we came to an agreed upon price, the offer was formally put into writing and details were hammered out through attorneys. Same when we sold.

Unless it's a complicated offer or there are multiple buyers making offers I don't see the point of having an initial offer in writing that will then have to be updated after every step in price negotiation.
Interesting. It would amusing to have a spreadsheet laying out some of the customs/ procedures by state.

'Round where I live I have often heard the expression "write it up and we'll talk."
"Talk is cheap".

If I had a Buyer that insisted we accept a verbal offer before they did a written offer, I would have my realtor respond back "Not interested", and I'd be very leery of any written offer from that Buyer after that.
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jfn111
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Re: Offer for a house

Post by jfn111 » Mon Jan 13, 2020 1:06 pm

A verbal offer is worth nothing. A written offer with a strong pre-approval is the only offer we will even consider.

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hand
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Re: Offer for a house

Post by hand » Mon Jan 13, 2020 1:41 pm

bjames310 wrote:
Sun Jan 12, 2020 11:35 pm

I made the dual agent mistake in the past. Such a terrible move. Bet you can’t find anyone (but the dual agent) who recommends doing this.
Not the right path for the OP, but I would absolutely recomend the dual agent approach in many cases for a sophisticated buyer.
While it should be obvious to the buyer that the dual agent is conflicted, it may not be to the seller.

Dual agent has strong financial motivation to 1) push seller to choose the dual-agent's buyer instead of other substantially equal (or perhaps better) offers, 2) potentially cut transaction costs (and therefore total costs) as they don't *have* to make full commission on both sides.

Downside is that dual-agent is likely extra hungry / extra pushy to lock in the deal (pressure to sign now, pressure for inflated earnest money, pressure to accept the deal), and less worried about potential issues that could effect either buyer or seller later on.

Hidden upside is that dual-agent's conflicts are obvious and often explicitly stated instead of a buyer's agent whose "fiduciary responsibility" is effectively unenforceable, and who has hidden conflicts with their own financial responsibilities.

Next time I buy, I expect to use/exploit the dual agency model for my own benefit.

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nydoc
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Re: Offer for a house

Post by nydoc » Mon Jan 13, 2020 2:11 pm

Thanks for all your replies. In summary-
A dual agent is not a good idea.
For a first time home buyer a buyer’s agent will be helpful- I have one.
Offer could be either verbal or written.
Written offer should be treated like a full contract and should include all contingencies and be reviewed by a good attorney- this is what I am doing at this time.

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