OfflineHi all,
My partner and I are just finding a realtor that is aggressive and willing to work with us! We are trying out Matt Larson's 25:1 system, we got our 1st list of 100 listings from our realtor, based on the criteria we gave him. We sorted through and found the ones we want to make offers on and got that back to our realtor. He (our realtor) said the written offer letter was 6 pages long so he would do 5-10 at a time send it to us to get our electronic signatures and from there we should expect to get our offers back within a couple of days. Ok, so all that is cool, what I am confused on is the offer letter. Should our exit clauses be mentioned on the offer letter? Or is this just something used on the contracts?
Up until this point we have only used our bandit signs, yellow letters and CL ads to attract sellers. So we only made verbal offers to our sellers and of course if any had accepted we would get the contract signed and that is where we listed our exit clauses. But now that we are attempting another strategy I'm just a little confused on that issue. Also, with this strategy, is the "offer contingent upon financing" clause okay to use?
Any and all suggestions/advice is welcomed and thanks again to everyone on this site for your hardwork and dedication!!
Nicole
nicoleryane
Working diligently to make that first deal!
lol, that makes sense, I guess I'm overthinking this! I guess I'm confused on the process that happens with a realtor and a house from the MLS. Can someone explain that to me...
nicoleryane
Working diligently to make that first deal!
Always ad an exit clause when you fill out the paperwork with the realtor.
" Not Having a goal is more feared than not reaching one"
Christa Niven
ok now I'm confused, what paperwork? The offer or the purchase contract?
nicoleryane
Working diligently to make that first deal!
Put the exit clause in with the offer.
" Not Having a goal is more feared than not reaching one"
Christa Niven
on the purchase agreement,
"Subject to whole house inspection with results satisfactory to buyer."
This will leave you a way out with anything condition wise that you find with the house. The seller can attempt to fix the problem or you can try to renegotiate.
You might also consider adding,
"first right of refusal"
This might help you keep the deal. If the seller gets a higher offer, s/he could go around you and sell it to someone else. This clause should allow you to match the accepted offer if you choose to do so.
There are other exit clauses that you can use too.
"Subject to financing".
Too many "subject to's" may scare the seller away because of all the hoops that the buyer and/or seller would have to go through...
No financing, no transaction.
The more thorough the question, the more thorough the answer.
Please fill out your profile with as much info as you're comfortable with.
Thanks.
So, as of right now: Your realtor has basically told you that he will send you 5-10 offers per week, until all your offers are submitted. Fine.
Once those offers are accepted by the owners/sellers of the real estate (maybe after a little bit of counter-offering and negotiation), the offers then become legally binding contracts. Therefore, you should make sure that the offers contain all the language, protection, and contingencies you require. That's what Christa meant when she was advising you to make sure that your offers (aka "paperwork") have all your contingencies (aka "exit clauses") Keep in mind, that sellers will often balk at/ reject an offer if it is loaded with too many contingencies. Protect yourself appropriately, but try and be spare with them.
Generally speaking, an inspection contingency will often be enough to get you out of a property that doesn't suit you (for whatever reason). As far as the "offer contingent upon financing,", this only makes sense if you are, in fact, putting in offers that are not CASH offers, which is not a tenet of the 25:1 program. In effect, you're saying, with your CASH offer, that you have the offer money available to you right now and you don't need a bank. So it makes no sense, then, to make the offer contingent on financing, since it is implicit in your offer that you have the cash available.
Cool? Happy investing.
Your friend,
SHINE
I appreciate all the advise. Its makes soooo much more sense to me now. I understood somewhat but all the pieces of the puzzle go together now!
THanks again all
nicoleryane
nicoleryane
Working diligently to make that first deal!
In the offer, I would put, Offer to expire if not accepted within 48 hours of this date. This will keep the seller from shopping your offer around. There is probably legal way to say that, so see if you can find a re attorney to help you with the correct wording. Also you can explain to the re attorney what kind of contingencies you want in the offer and they should be able to write it in the offer properly.
Hope that helps!
RENinja
"Remember, success is a journey, not a destination.
Have faith in your ability."
Bruce Lee
Hey Tony,
If you are submitting offers through your realtor, you will not have a choice of what purchase agreement to use. Your realtor will be using the standard CAR Purchase Agreement. (Of course, if you are submitting offers to private parties/FSBO's, you can use any contract you want, including the ones that are on this site).
That being said, you WILL have option on how to use that CAR template to your advantage. For instance, you mentioned you want to include some contingencies. You can do that, although you will be adding them to the CAR Purchase Agreement, as opposed to one that you download or create. Have your realtor review the contract with you, and will see (or ask!!) how that CAR template can be presented to protect you as the buyer.
Keep in mind, also, that depending on who you are submitting offer TO, you will not be allowed to include certain conditions and/or contingencies in your offer. For instance, banks will not allow the clause "and/or assigns" because of internal regulations that prohibit them from accepting offers that are assignable. So, I'm sure you've heard, but there is no assigning on bank REO's. Hence, the double/back-to-back/simultaneous close.
Also, these lending institutions will have other specific criteria and addenda that spell out other conditions that are non-negotiable if you want to buy their property. Seasoning clauses, non-assignability, indemnity clauses, as-is agreements, etc., are becoming standard conditions when dealing with banks/institutions. Just a heads up, in case you or others didn't already know. Again, your realtor can help you with specifics. Obviously and ultimately, you must decide for yourself if you want to go through with offers, based on your comfort with what contingencies will/will not be included. Make a couple offers and this will be cake.
Happy investing, CaliTony.
Your friend,
SHINE
The fewer contingencies the stronger the offer. I go with only inspection contingency and a title contingency.
Shorter contingency period the better. I have heard Matt suggest he uses 14 days. I often go with a 10 day. Depends on the strength of your buyers list.
Think Less ~ Do More
Take Action = Results!
If it is to be, it is up to me.
put on there subject to partner's approval, then no matter what you have an out - remember your partner can be your spouse. This way if the property checks out ok but you still haven't got your buyer for it - you can answer back and tell them your partner doesn't approve of this property.
I just want to know if anyone is having any luck making offers thru a broker on non bank owned properties on the MLS thru a broker, adding the clause Deposit given after acceptance of offer,and after my approval of a 10 day inspection period? It seems no brokers are going for that,and im not having any luck getting offers accepted. Seems to me their not even interested in my offer being low anyways,and adding that clause pushes them even further away from presenting my offer. I also added a clause that says buyer request sellers refusal in writing, signed by seller if offer is refused. Not having any luck with that too. Brokers are pretty much laughing at me. Then i had a broker presenting my offers, and now hes bailed out on me. Any tips would greatly be appreciated