#262 in a series of true experiences in real estate
November 1998, Hills Newspapers
Our sellers had been busy for weeks moving to their new house and preparing the old one for sale. We’d met with them a number of times, collected information for the MLS listing and for our house flyer, discussed pricing and made suggestions for pre-sale inspections, repairs and staging. The entire orchestration was going well; everything would be ready on time.
Now our clients wanted to know about offers. Would there be any? More than one? What were our expectations about how the sale would go?
Their house is located in a desirable lower-hills Berkeley neighborhood. It’s a large family home built in the 1920s, and it has a good deal of charm. The owners have maintained it well. We felt that we had priced it reasonably and that there would be a fair amount of demand for it.
We plan to mail house flyers to agents in the area prior to the house being shown. We want to get agents thinking about whether this house might work for their clients. As there are often 90 houses on the Berkeley house each week, agents can’t possibly see them all. We’re hoping that advance publicity will result in more agents seeing our listing.
We’ll hold the house open on Thursday for agents (and anyone else who wants to come) and again on Sunday. We’ll tell anyone who is interested in the house that we won’t look at offers until the following Friday.
We don’t know for sure that anyone will make an offer then, but by allowing this time for buyers to see the house, we improve the chances.
We will give agents whose clients are interested in the house an information package: copies of general physical and fireplace inspections, termite report, proof of the new roof, description of the earthquake retrofit work, seller’s disclosures and our own disclosures – everything about the house that we know.
The agents and buyers will read all this and decide if they’re going to write an offer. If they are, they’ll let us know, and we’ll make an appointment on our chosen Friday for the agent to present the offer.
When possible, we and our sellers meet with the buyer’s agent to hear an offer. The buyer isn’t there. Sometimes the seller can’t be either. If, for instance, the seller lives a long distance away, or is ill, or simply doesn’t want to be a part of the presentations, we may listen to the offers ourselves and later convey information to the seller.
Usually by Tuesday or Wednesday following the Sunday open house, we have a pretty good idea about whether there will be any offers, and if there will be more than one. If there are lots of showings and a number of agents are contacting us for property packages, it is likely that there will be multiple offers.
But because every buyer would prefer not to be involved in a competitive situation (and some refuse to be), they may not decide what to do until the very last minute. It frequently happens that a day before the appointed day, there is one offer only; the next morning, there suddenly are several.
If there is more than one offer, each buyer’s agent is given an individual time to present his offer. “Present” is an apt description for the agent is there to represent as well as possible his buyers’ intentions and feelings. A good agent will describe the strengths of the offer, talk about who the buyers are and why they have chosen this particular house.
He will go over all of the terms of the contract including price, timing, and contingencies. He’ll provide evidence of the clients’ ability to get a loan, show us the buyers’ deposit check and the buyers’ signature on all of the parts of the house package we’ve provided.
We will hear all of the offers, ask questions if we have them, then send each agent away with a promise to call them as soon as possible. Then the sellers and we will talk, compare the offers, decide if any one of them is acceptable as it stands or, if not, if there is an offer the sellers would like to counter.
There is a lot more to an offer than price. For example, a buyer may be willing to buy “as is,” take the responsibility for termite or other work; this will raise the seller’s net proceeds. A buyer may be able to close the escrow more quickly than another buyer, and this may be important to the seller. Perhaps a buyer can complete his own inspections in a short period of time. And so forth.
If there is an acceptable offer, we contact the agent who wrote it. We may say that it is fine exactly as it is, that our sellers have already signed it. Or we may ask if the buyer will agree to change something in the contract price or terms. This may initially be done verbally, then if agreeable to both sides, written up and signed.
Now we’re in contract! The buyer’s agent will open escrow and deposit the buyer’s earnest money check. The buyers will make their inspections and, if there is a loan, an appraisal will be ordered.
If all goes well, the inspection contingency will be removed, a preliminary title report sent to the lender along with the appraisal, the loan given final approval, and he sale completed as expected – often in 30 days, or even less.
There are, of course, things that sometimes go wrong during the process. For example, something unexpected can come up during the inspections. There may be further negotiations between buyer and seller over repairs, and these may or may not be successful. It sometimes happens that no agreement can be reached and the buyers withdraw.
Also, lenders right now are backed up with refinances. This can delay the preparation of loan documents and extend the closing date. If there is a string of sales, several buyers and sellers in a row waiting for closings on houses they are selling and buying, timing can be tricky.
But surprisingly and gratifyingly often, all goes well. The best predicting elements of a successful sale are: A buyer who knows the market, really does want to buy, and who has been as thoroughly as possible informed about the house before he makes his offer; the seller has realistic expectations and it is his intention to sell; the agents, inspectors, lenders and title company people are efficient and thorough. These are winners all!
