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It’s been a minute hasn’t it?
First, I want to remind everyone that CLIENT APPRECIATION is BACK ON! Saturday, December 18 from 3pm -6pm for … Spiderman: No way home!
We are pretty excited to be doing this as we couldn’t last year, or earlier this year. Chris Berg, and I are hoping you will join us for this latest Marvel installment. As always, email me or Chris Berg (firstname.lastname@example.org) with how may adult/kid tickets you will need, and any with any questions!
Sometimes, ok, a LOT Of times… real estate is not ‘cut & dry’… even something simple has MANY different steps, and side tracks that can change the direction. The ‘simple’ term of Pending is one of those…. So, let’s talk about Pending…
Simple description of a Pending home is a home that has an accepted offer on it. It is ‘Pending’ on the completed sale. If a home is ‘pending sale’, I can’t show it as it is already under contract.
There are 4 things needed for a home to go Pending…
1. A written/typed offer by an interested buyer,
2. The written/typed offer must be received by the sellers Realtor…
3. The offer (and ALL terms) must be signed around and AGREED to by BOTH the Buyer, AND the Seller.
4. The mutually agreed upon purchase/sale agreement must be received by the buyers Realtor.
Pretty simple, right? …..or not…. so let’s break this down a bit…
1… Verbal means absolutely NOTHING in real estate. There are a few other things that don’t mean anything in Real Estate too, but this is the #1 rule… verbal isn’t worth the piece of paper it is written on. If it isn’t in writing, it doesn’t exist.
2… The offer must be received by the sellers Realtor. If they don’t receive it, it can’t be considered…right? This is why, when working for a buyer, a buyers Realtor will ask for confirmation from the sellers Realtor that they have received our clients offer.
3…. This seems to be where many people, and yes, many Realtors too, lose the trail. So, let’s spend some time here. Once received by the sellers, the sellers have 3 responses they can make…
a) accept the offer,
b)counter the offer
c) decline/ignore the offer, or let the offer expire. (No, the seller does not have to respond to an offer)
An offer to purchase by a buyer puts the ball in the sellers court. In our current sellers market, there is a very high chance that the home will have multiple offers from interested buyers on the home. Sometimes the sellers Realtor may contact a buyers Realtor about some items on an offer that the sellers are considering countering. Remember … verbal means nothing though so don’t get excited. The sellers Realtor may be contacting a few of the buyer agents about questions on their offers.
If the seller chooses to counter a buyers offer, it must be in writing to be a legitimate counteroffer. This does not mean that the offer is agreed to. A counteroffer is a NEW offer from the seller to the buyer. The ball is now in the buyers court, and they can choose to either
A) Accept the sellers counter offer
B) Counter the sellers counter offer
C) Decline/ignore/let expire the sellers counter offer.
A…Quick answer on option A, if the buyer chooses to accept the sellers counteroffer, buyers sign &/or initial the counteroffer, and we move to step #4… which is…buyers Realtor emails the mutually accepted offer (purchase/sale agreement) to sellers Realtor, and we go Pending.
That is the simple answer, but in Real Estate, very little is this simple, and this is where we need to be VERY CLEAR. Real Estate is not Kmart, and there is No Layaway. During the counter offer step, this home IS STILL ON THE MARKET, CAN STILL BE SHOWN, AND YES, CAN STILL RECEIVE OTHER OFFERS. Even one of the other current offers can offer other terms/change their current offer, and if the seller chooses to go with a different offer, they can. All that is needed is an addendum signed by the seller withdrawing the counteroffer that was sent over to the buyers Realtor, and BAM… A different buyer is now in the first position. In Real Estate, time is of the essence. Realtors have a saying, “If you sleep on it, you may never sleep IN it.”
For example… One of my listings received an offer… my client countered the buyers offer. While we were waiting on the buyer to respond to our counteroffer, we received a better offer. My seller client chose to sign a counteroffer withdrawal and send it to the buyers Realtor, and then we accepted the other offer. Of course I received a call from Buyer #1’s Realtor, and she was upset for her clients. I understand where she was at… I really do, but again… you can’t put homes on layaway while you ‘think about it’, because someone else isn’t thinking on it. Until an offer is mutually agreed to and signed around by both parties, and BOTH Realtors have received a copy of the mutually agreed to, and signed around purchase/sale agreement (aka offer) then that home is NOT PENDING SALE. You need to have all 4 things to have a Pending Sale Home.
2nd example.. one of my other listings received a couple of offers, and we countered one of those offers. Then we received another offer that was a great offer, but before my seller had a chance to do anything, the offer we countered accepted our counteroffer, and emailed me the buyer signed counter offer. Once the buyers Realtor sent this to me, we now had a signed around, mutually agreed upon Purchase/sale agreement (the offer), and we are pending. Once a home is Pending…the other offers don’t matter as we are in contract, and another offer can not be accepted unless the current contract is broken, or rescinded. The other offer can go in a ‘back up position’, in case the current contract fails, and then the ‘back up’ offer can move into first position…. but that is a different email.
B…So, what if buyer chooses option B, and chooses to counteroffer the counteroffer? Well, a counter offer to the counter offer is, again, a NEW offer …to the sellers this time. A counter offer is always a NEW offer. It is not a continuation of the offer. Sellers now have options A-C again. The home is still available for other buyers, and yes, other offers. This does get sticky.
C… Did I hear someone ask about option C? The seller does not have to respond to an offer, if they choose not to do so. Did I say that already? Choosing not to respond to an offer is the same as letting it expire. The seller can also choose to formally respond with a rejection. Sometimes…not so much in this market… a buyer will want to make an offer, “let’s just see what the seller says”. Then, when the seller ignores it, they get upset. Again, and I will say it louder for those in the back… the seller doesn’t have to say anything, or respond to an offer at all, if they don’t want to.
…and finally.. 4…
The mutually signed around offer (aka purchase/sale agreement) must be received by the buyers Realtor to be pending sale. I know I have said this a couple of times here, but it is very important. Even if a buyers Realtor receives a phone call that the seller is accepting their clients offer… it is NOT done, or confirmed. Remember.. verbal means nothing. Until that mutually signed around offer hits the buyers Realtors email box (or sellers Realtors email box in the case of a counteroffer) … it is not mutual.
…as a final thought… sometimes we will see buyers making offers with an offer amount that is super high (we see this on escalation clauses), or with terminology like, ‘home sold as-is’, with the intention of just trying to get their offer accepted…. but (and here’s the problem) with the later intention of trying to get the price down, or buyer wanted repairs….after acceptance. I have even heard, “well, I didn’t actually think that the offers would go that high” with escalation clauses. This is not a good game plan…and why we see many ‘Back on the market’ homes. The sellers refused to re-negotiate those terms, or negotiate repairs at inspection, etc.
Making an honest offer may not get your offer accepted every time, but it will make your offer more solid, and more likely to close when you do get it accepted. I tell my seller clients all the time… “the best offer isn’t always the highest offer… the best offer is the one most likely to close.”
So, what do you take away from this email? Besides that Real Estate is clear as mud? Remember that verbal means nothing, and remember that time is of the essence. If you are in a counteroffer situation… don’t dilly-dally… or you could be passed up. I am not saying that you should also be signing things willy-nilly either. This market is crazy… like your EX Significant Other CRAZY… but remember that a home isn’t like a bad Amazon purchase you can send back. If in doubt.. DON’T! As your Realtor, we really want you to LOVE your home, and still love us the next day. Got questions? Always ask…
As always, “may the odds ever be in your favor” I am here for any questions, and always available to help you with your next Home Adventure… Whether you are buying, or selling… I got you Boo!
Have a great day, and I will talk to you soon,