Chapter 11: From Offer to Closing Summary

Preparing the Presentation 

Avoid telling the price of the offer and giving a presentation over the phone.

Usually the listing agent presents the offer to the sellers. Exceptions:

• The selling agent may accompany the listing agent to provide backup information or clarify terms
• If the sellers do not have a listing agent, the selling agent makes the presentation.

Additional documentation to support the offer:

• Estimated Sellers’ Proceeds If the offer is less than the asking price, prepare a new form based on the offering price.
• Competitive Market Analysis. If the property has been listed for several months and the market values have fallen, update the CMA.

Handling Multiple Offers

• You must present all offers together.
• If you have knowledge of another offer, you must let the sellers know this at the time of your presentation of the current offer.
• If you know of any verbaloffers, you must inform the sellers of this fact.

Meeting with the sellers

• Reviewing the Listing
  • Briefly review such things as advertising efforts, open houses, showings, etc. This review helps set the stage for the sellers' reaction to the offer. 
• Giving Buyer Information
  • Raise the sellers' comfort level that they will be selling their home to people who will really appreciate it and presented a reasonable offer.
• Presenting the Offer
  • You should go through the offer paragraph by paragraph, answering any questions they have.
  • If the offering price is less than the listing price, you'll need to defend it to the sellers.

Making Recommendations

Once you present an offer, the seller can accept the offer exactly as it is written, reject the offer totally or reject the offer and submit a counteroffer to the buyer for his or her consideration.

Your goal should be to seek the sellers' acceptance rather than a counteroffer.

If you believe for whatever reason that the offer is not in the sellers' best interests, you should not recommend its acceptance. The sellers' best interests take precedence over your commission. 

That a counteroffer is a rejection of the original offer and submitting a counteroffer gives the buyers a way out.

Obtaining Acceptance

Most sellers object to offers based on the offering price. Things to look at in the offer include earnest money amount, type of financing, contingencies and closing/possession date.

Writing Counteroffers - Some common items considered for counteroffer include:

• Increase in the offering price or earnest money deposit.
• Change in possession date or terms of a loan to be carried.
• Placement of limits on liability for certain repairs.
• Clarification of a seller's right to accept other offers until the counteroffer is accepted.

Important tips to follow when drafting a counteroffer:

• Amend the acceptance clause of the original purchase offer to refer to the counteroffer.
• Don't exert pressure on your clients to include something the other party wants.
• Be sure to date and properly attach any supplements.
• Make sure the document is signed properly.

Delivering the Counteroffer

• Any change to the last offer made creates another counteroffer.This process will continue until the buyer and seller reach an agreement or either the buyer or the seller walks away from the negotiation.
• An offer or a counteroffer may be withdrawn at any time before it has been accepted.

Accepting the Offer

• This agreement is a legally binding contract between the buyer and the seller. The licensees are not parties to the contract.

The acceptance and formation of a legal contract does not take place until the party who made the offer is notified. Notification is the delivery of a signed copy of the acceptance to the offeror.
 

Looking Towards Closing

Since the broker doesn't receive the commission until escrow closes, it's important to work diligently to ensure that the closing actually happens.

• Provide all documentation to the escrow company and check with them each week to get a progress report.
• Help the buyers with loan applications and supporting documentation.
• Contact your clients weekly to let them know what's happening and advise them of any problems that need resolving.