Thirty Days of Real Estate – Day 16: Crafting a Contract to Buy Real Estate

Real Estate with Dallice: What makes a compelling Contract to Buy?

A compelling offer to buy addresses the needs of the Seller. So first and foremost: Figure. Them. Out.

The MLS listing information is a good start. It gives you the list price – which is almost like the Seller has made the first offer. It also hold info or clues as to the terms they prefer. Comments like “seller prefers a rent back” or ” quick close preferred” or “sold as is” all give insight.

The next step is for you Realtor to ask the Listing Agent. Shock, horror… Yes, actually pick up the phone and have a person to person dialogue whereby questions about what the Seller wants, are asked. Is this ethical, legal?  Of course it is! And it’s in the best interests of the Buyer so anything less is completely unacceptable, in my opinion. The more info you can get, the easier it will be to craft a Contract to Buy that is acceptable to the Seller and that is our goal, right?

The Colorado Real Estate Commission approved Contract to Buy and Sell Real Estate is long and filled with contingencies. As the buyer, you’ll find they mainly favor you so hold tight and lets address them.

Contract to Buy Contingencies, Deadlines

On page 2 of the Contract to Buy, there is a nifty dates and deadlines table. Not only does it give lots of info in an easy to read box, but each deadline also has a paragraph number next to it. You can use this to reference more detail about the date/deadline in the body of the Contract to Buy.

When filling out this little box of dates and deadlines, you will be using the info you have about the Sellers needs, as well as your own needs. For instance, if the seller needs their money by March 9th, because they are are closing on another house that day, give them an offer that has a closing date of March 9th or earlier. It will make them happier to go with an earlier date (hint, hint). If the seller has told you they are selling the house as is, you can still have an inspection; But may want to eliminate the Inspection Objection (asking sellers to fix stuff) deadline. You can still preserve your right to terminate the Contract to Buy in the event you find something really bad, by keeping the Inspection Termination Deadline in there.

Price: Sometimes there is wiggle room and sometimes there isn’t.  That’s life. Not everything is a bargain. The perfect Contract to Buy price is one that the buyer and seller can both be happy with… or equally unhappy with. 

Aside from price and deadlines

The Seller may have other needs. You too.

Remember that nasty old pool table in the basement? Did you want it? If you found out the Seller didn’t want to move it to their new tiny house, could you agree to let them leave it? It’s not the pool table that is really being discussed. It’s a test. How well you listened to the Seller is being tested. How much you want the house is being tested. If you want the house, you’ll find a win-win way to work with them and meet their needs. Put the darn thing on Craiglist the day of closing if you have to. These little things build credibility and good will. You may need to leverage this in the future so don’t burn bridges, don’t be confrontational, don’t be all “me, me, me!”

Some real life Contract inclusions, contingencies and such… Get ready to giggle!

  1. Buyer has is negotiating a plot of land that includes garden, barn and ample land. Seller is moving from this to a condo in Seattle. Seller informs Buyer that their cat has never known another home and asks if Buyer will adopt cat as part of the real estate Contract to Buy. Buyer replies with “Maybe. How old is the cat? Can we see the vet records of the cat? Does the cat have any pre-existing conditions we should know about?”  Yes, this deal involved a house inspection and a cat inspection!
  2. My Buyers went to and open house and found the house of their dreams. We submitted and offer with a contingency to sell their existing home. The Seller responded by booking a showing on my Buyers existing house and I thought it was “due diligence”… until that Seller put an offer in on my Buyers house. Talk about contingencies! Each Buyer bought the others house; each one needed financing and the deals had to close simultaneously because funding on the new house was contingent on the sale of the old house for both parties. (I will go my whole career without that happening organically again!)
  3. I was selling a house that I had helped my clients buy, a few years prior. When they bought the place, it had heavy floor to ceiling curtains in the living room. They took the curtains down and installed new clean and stylish blinds instead. When we listed the house there were no pictures of the old curtains in the listing. The Sellers sent word that they could leave the old curtains if the Buyers would like them, but they needed to know by Inspection Objection Deadline. After that, curtains would get donated. They left the curtains in a box in a closet for inspection by Buyers.  We never heard back. No calls, texts or emails about the curtains, so the Sellers donated them to Sister Carmen. Nearer closing, the Buyers Agent called and said “where are the curtains”. To which I replied “they were donated to Sister Carmen”. He was annoyed and asked me to retrieve them because he had called me to say (on inspection day) that they actually wanted the curtains. Phone records proved otherwise, so I told him they could go to Sister Carmen and find them. The agent then told me they didn’t know what they were looking for and that made it impossible. (Well, if they had indeed seen them at inspection, they should know what they look like, right?)  I directed him to the prior MLS pics, and he agreed they would go look for them at Sister Carmen.  A few days later he called to say that  no-one could help him at Sister Carmen because they were mentally challenged. OMG! I couldn’t really believe what I was hearing. Then he tried to tell me that the curtains were supposed to be included per the Contract to Buy, which states all window coverings are included. He wanted me or the Sellers to pay for new curtains. To which I replied, “that line in the Contract to Buy is for window coverings in the house at the time of Contract… So go ahead and prove they were in the closet that day!”  I never heard a peep about the curtains again, needless to say. (And my clients never even heard about this. It’s my job to run interference and block this sort of crap and stress from ever reaching them.)