Stage Two: Offer to Buy Colorado Real Estate
First read Stage One: Thinking About Buying Real Estate then get yourself ready to make an offer to buy Colorado real estate by reading this post too.
You have been diligently monitoring the market, have met with a lender, been pre-qualified and now are chomping at the bit to actually step inside homes for sale. A precursor to making an offer to buy Colorado real estate.
The first part is pretty easy. You and your Realtor find a time that works for you both and the Realtor will book showing appointments for the properties that look interesting. Realtors are generally very flexible people… They are used to working around the clients schedules and unlike most service providers in your life, they can often work evenings and weekends as needed. However, please don’t take this for granted. Realtors have lives outside of their work too!
Each real estate agent is licensed. The licensee database is public information and you are welcome to check it. Access to the property is given only after establishing the agents credentials.
Showings instructions include things like:
-Don’t let the cat out
-Take off shoes or use booties provided
-Leave lights as found
-Close and lock all doors and windows upon leaving
I cannot stress enough how important it is that both the agent and potential buyers follow these instructions. The whole real estate showing system is based upon good faith and respect. The Seller should not have to worry that their pets are being mistreated if left in the house during showings, they should not have to clean up after muddy feet or be concerned about the security of their belongings during showings or after.
The agent has been given permission to show the properties within a certain time frame. Should the agent enter the property outside this window, it would be considered trespassing. Should the Buyer enter a home without an authorized agent, it would be considered trespassing.
You may have read my recent post on trespassing.
A quick note on feedback.
Each agent that shows a property will be asked to make comments and suggestions afterward. Feedback generally includes my opinion of the interior and exterior showing conditions, how I think the property is priced compared to other homes we have seen, how long I think it will take for it to sell and what can be done to improve its marketability. I often incorporate the Buyers comments into my feedback. Its an honest way to let the Seller know how their house compares to others we are seeing and nice way for the listing agent to convey suggestions or criticisms without coming across as “the bad guy” themselves. I have no problem telling a listing agent that the house smelled like cat urine or boy socks, or that the vacant house felt cold and small and I believe it would sell faster if staged.
So… here you are, shopping for houses and you see “the one”, or at least it is close enough to meet most of your needs (I say 85% is generally a good rule) and you have been educated by your agent, so you understand there is no perfect house!
Writing an offer:
Before you make an offer to buy Colorado real estate, it is advisable to gather some more information about this property. This is where your agent is worth his/her weight in gold. They should be able to do some research and help determine what an initial (or final) offer price should be.
In addition to finding sold comparable properties and analyzing the market surrounding this house, I usually try to find out such things as:
Last sale date and price.
Last recorded mortgage. (To make rough assumptions about how much equity might be in the property.)
The owners name(s)… then attempt to find out as much as possible about them using the internet and public records, including their tax payer address.
Have building permits been pulled in the time the owner has had this house?
Are there any disclosures already available?
I like to call the listing agent and have a chat, try to gauge the Sellers motivations for selling, whether they have had other offers, serious interest or nothing as yet.
Ask the listing agent if there is any other information the Seller thinks we would benefit from.
Ask the listing agent “If we were to submit an offer to buy, what is the turn around time for a response and are there any dates that we need to work with?”
At this stage, I generally don’t tell the listing agent to expect an offer, unless I know there are already offers there, or coming. I would prefer they didn’t alert any other interested parties and coerce them into a competitive bidding situation.
As the Buyer and agent begin the process of writing an offer, the agent will also discuss with the Buyer all their options and together they will come up with a negotiation strategy (which deserves a post all of its own). The goal is getting all the Buyers needs met with the Contract to Buy Colorado real estate.
What makes a strong contract?
Quick closing/specific date for closing depending on the Sellers needs
Cash or well qualified buyer, indicating a low probability for lending issues to force a termination of the contract weeks into the process.
The fewer contingencies the better (needing to sell another property, requiring inspections, appraisal)
And of course… the closer the offer price is to the list price, the more likely the seller is to a accept it.
A weak contract?
Low offer price combined with questionable ability to qualify for a mortgage, closing or other dates that don’t meet the Sellers needs and (this may surprise you) annoying the Seller.
Yes, it is possible that by letting out the cat during your second showing and leaving wet snowy footprints on the freshly cleaned carpet, the Seller has already taken a dislike to you. In this case, an acknowledgment of wrong doing and an apology would go a long way… But you better hope your offer is not competing with a similar one – from people who haven’t pissed off the Seller!