Adam's Desired Offer Elements When Representing a Seller

Seller preferences highly vary, but here are some typical components of offers that sellers I represent appreciate, as well as other information specific to my listings that would be helpful for a buyer's agent to know when making an offer.

Verbal Offers

While in an exceptionally tight deadline, a verbal offer or counter is possible, full-blown written offers, acceptance, & counters are highly preferred, though even if not submitting an offer formally, I'd love to hear the sooner the better if you're planning on one in the event of a multiple offer scenario so that my sellers don't accept something without even knowing that you were working on one.

Offer Type: VAR, Followed by CVR, Followed by REIN, Depending on Circumstances

While I've dealt with varied offer types, I am most familiar with REIN offers, secondarily, Virginia Association of Realtors offers., & 3rd CVR Purchase Agreements. Due to the offer template details, I typically prefer to work with VAR when representing sellers, though I'm wide open to REIN (which Hampton Roads buyer's agents more typically submit on my listings), CVR, & other offer types, and would prefer to learn a new offer type rather than steering a seller away from an offer type that I am unfamiliar with. If looking to submit a VAR or REIN offer and you are unfamiliar, be sure to become familiar with some of the most significant differences between REIN & VAR prior to offer submission.

If you're planning on submitting an offer type other than VAR, CVR, or REIN, it's ideal to send me a copy of a blank offer prior to you writing one in case there would be a >1 hr gap in between the 2 emails so that if time allows, I have some time to go through the offer type in advance, especially in a multiple offer scenario with an impending deadline. Among offers besides VAR, CVR, & REIN, the more commonly it's used in SE VA, the better.

Typical Basic Preferences

My seller preferences often include typically desirable elements like:

1. the least contingencies (i.e. home inspection, other inspections, & appraisal)

2. most guarantees (i.e. above appraisal guarantees, waived appraisal, or more rarely offered inspection-related due diligence fees)

3. highest price

4. lowest fees for the seller (i.e. offering to pay some of the seller's closing costs)

5. being offered as is,

6. mortgages that have gone through manual underwriting if not purchasing in cash,

7. textable # for lender,

8. preapproval and proof of funds

9. most other pertinent supporting documentation/information.

Atypical Ideal Offer Preferences

Some things I like to use at times with buyers I represent and like to receive when representing a seller, though not expected unless specifically requested in some cases include:

1. If a buyer hasn't gone through manual underwriting yet, it's nice to know if the buyer has submitted tax/income documentation. I once represented a seller where the buyer hadn't paid taxes in years & we didn't find out until the week of closing that we wouldn't be able to close due to the buyer not being forthright.

2. Preapprovals that far exceed the offer price demonstrate a low debt-to-income ratio

3. A summary of offer terms in the email sent.

4. If a buyer is using a deadline, which I don't like to receive, but know that some buyers may send anyway, I like it to be clearly stated in the email title of the offer & relayed via text or call soon after the offer is sent. Keep in mind that I'm textable 24x7 and you won't wake me up with a text so sending at 2 AM is no problem & preferred over waiting until 8 AM. If you don't text, please email me a text.

5. When I represent a buyer using a mortgage, at times when a strong supporting element, I'll include information like lender-pulled credit scores (when above 750), years on their current job (i.e. >5), and proof of funds for down payment/above appraisal guarantee (i.e. if the buyer has much more than they need or if offering a fat above appraisal guarantee). Of course, while not expected & while unusual, any of that is nice to see when representing a seller as well.

6. Since I try to avoid RE on Sundays, I have a proclivity to desire offers on Saturdays over Sundays if a buyer is able to expedite things and get them in sooner. That said, no reason to delay an offer to Monday if looking to send it on Sunday, just know that in the absence of a deadline, I'll be sending it over if you let me know about it via text without actually looking at it much if at all.

7. If you send a letter to the seller from the buyer, please don't pass on violations of any fair housing violations, which are frequent enough for NAR to talk about the potential liability of them in an article titled "Love Letters or Liability Letters?" even though I sometimes send them myself after commonly asking the buyer to change some things accordingly.

8. When I represent buyers, I like to include in any release that the seller may share the inspections that we have provided with other buyers in the event of termination. Sometimes when I represent sellers, the buyer's agents & buyers are too apathetic to care and refuse to share those or provide that authorization even when they are shared, meaning I'm not able to share it with others even if I have it. Because of that frequent issue, when I represent a seller, I like the offer to include the provision "If buyer terminates &/or releases in the future, buyer to provide seller with any inspections that they performed and provides authorization to distribute those inspection reports to future prospective buyers/buyers' agents."

9. Due diligence fees provided to seller if buyer walks due to home inspection

10. Another ideal provision for sellers I like to receive when a home inspection is occurring is the following 2 options, with the second dependent on the 1st but which isn't required simply because of the 1st provision, though ideal when combined:

    1. Buyers requests based on home inspection shall be limited to the following:

       1. A condition that impairs the normal stability, safety, or use of any improvements (buildings) on the property or

       2. Damage to any part of the improvements, but shall exclude any cosmetic flaws, antiquated systems (functional but beyond life expectancy) or grandfathered components that are in working order but would not comply with current building code if constructed or installed today.

       3. If a financial concession is requested rather than repairs, it shall be accompanied by the home inspector's estimate or the estimate of a licensed contractor.

    2. "Buyer's right to terminate the agreement prior to submitting inspection requests is waived. Buyer may only terminate if the requests that they submit to the seller that are within the scope of the request limitations are not agreed to by the seller within the contractually allotted timeframe for a response."

Unique to Seller Offer Preferences in Agent Remarks

Often I'll include unique preferences of a seller in my agent remarks, so be sure to check those. For instance, if the seller wants a seller possession agreement, I typically have it there. Here are more details on seller possession agreements from an article of mine on the subject.

Also, sometimes in agent remarks I'll include material adverse facts that should be disclosed or as is items. Either way, it's best to includes these in the offer itself so that the seller knows that the buyer is aware of material adverse facts & aware of the as is nature of certain items, if applicable.

Preapprovals/Proof of Funds

While prequalifications or preapprovals alone accompanied by a conversation between the lender after I call them are typically acceptable & nothing more financially speaking, when considering 2 similar offers, an offer with any of the following can get some "bonus points" when comparing apples-to-apples offers of the same financing type that I'll sometimes include in offers when I represent a buyer & may look favorably upon if presented to me representing a seller: 1. Loan that has gone through manual underwriting 2. Offers with proof of funds for appraisal guarantees & down payments 3. Written lender pulled credit score(s), especially if high 4. # of years of the buyer(s) at job, especially if high

Cash offers:

Sellers I work with typically like the date of the proof of funds to be in the past 30 days (the sooner to offer date, the better) and to state the name of the institution and the name of the buyer or the business that's purchasing

Escalation Clauses:

Proof of funds &/or a preapproval, when using an escalation clause, should show the amount up to the cap of the escalation clause.

Appraisal Guarantees:

If an appraisal guarantee is made in the event that the appraisal is below the contract price, the amount of the guarantee should be demonstrated as available via proof of funds.

Proof of Funds:

This would typically be a bank account statement or another document typically showing the name of the purchaser(s), the date, and the amount in the account, which should be sufficient for any funds needed (i.e. closing costs/prepaids if the seller isn't being requested to cover them in full, any down payment, any appraisal gap guarantee, etc.).

Businesses/Organizations Purchasing

If a business or organization is purchasing, please include documentation that connects the buyer to the organization, i.e. articles of incorporation that state that the buyer signing is the owner or otherwise.

Earnest Money Deposits (1%+ Ideal, but not Always Required)

I state to sellers the following: "I have seen where EMD's have gone to my sellers following the buyers walking in breach of contract. In some cases, an EMD amount (i.e. $1k) is below actual damages to sellers (i.e. if buyer 1 fails to close in breach of contract and buyer 2's contract is >$10k below the net of buyer 1). In cases like that, it's best to involve an attorney, but a high EMD reduces the likelihood of the need to get one involved in the event of breach of contract. I have also seen breaches like that where attorneys think the case has a low chance of success despite the clear breach (i.e. buyer failed to disclose to lender that they hadn't paid taxes in years and have heavy back taxes owed). If buyer is providing a low EMD, seller may want to counter with 1%. When I'm a buyer's agent, it's not uncommon for me to encourage the buyer to offer >1%, and I've never had a buyer who I represented who lost any portion of their EMD in any transaction, & I've done over 75 buyer side closings as of 5/29/23. In at least 1 case, a buyer I represented offered a >10% EMD, and it helped the buyer to secure the house." In some cases, sellers I represent are OK with lower amounts (i.e. $500 on a $200k property), but low EMD's can sometimes be denied by sellers who have had bad experiences or who would prefer to work with a buyer that's in a stronger position financially & otherwise for a higher EMD.

Inspections

For discretionary inspections that the seller isn't paying for, as typical, the shorter the timeframe, the better. For required inspections, where the buyer is asking the seller to pay for them, the longer the required timeframe, the better. Also, the lower the number of inspections requested for the seller to pay for, the better, as long as allowed (i.e. the seller should still pay for wood destroying insect inspections on VA loans).

Sellers I work with typically have no problem with contractors and inspectors coming to the house for inspections/estimate prior to offer. If doing so, please let me know if going beyond the timeframe present in Showingtime so that I can add a Showingtime rule for that extra time in the event that other buyers want to show it so that they know that an estimate or inspection is occurring during their preferred time & that they won't be alone. If you don't see that many showings in Showingtime, & would prefer a private extended time at the property, ask me about the prospect of scheduling multiple showings in a row for the home inspection/estimate(s).

Closing date preferences

• On vacant properties, closings sooner rather than later are ideal in most cases. For 10-31 exchanges, if a seller doesn't list a preferred date, feel free to ask.

• On owner-occupied properties, sellers I work with will typically state if they'd prefer a seller possession agreement in agent remarks of a listing in MLS.

• On tenant-occupied properties, I'll typically state the lease end date in MLS agent remarks if it's more than 30 days after listing.

• On short sales, sellers I work with typically like at least 90 days.

Offer Sight Unseen

While rare, some additional information regarding the quality of the video showing, i.e. what I share with offers when doing a site unseen offer, can be helpful, as can just a sentence or 2 on the subject if you don't want to provide more details.

As Is Offers

In the event that a buyer writes an "as-is" offer, sellers I work with typically prefer the language "as is" instead of a home inspection being for "informational purposes only" since "informational purposes only" taken literally would appear to limit a buyer's ability to walk based on the inspection or request any other form of concessions & I would prefer reduced ambiguity so all parties are on the same page. Likewise, language such as "no repairs to be requested" would appear to eliminate guarantees for items like wood destroying insect/appraisal required repairs and even when the cap for those is 0, eliminate the seller's ability to cure items required by the buyer's lender if applicable if taken literally & if the lender doesn't allow escrow holdbacks by the buyer. Also, written additions to the contract that negate the contract template are supposed to carry more weight than the contract template itself.

Home Sale Contingent Offers

I ideally like to see the following if available:

1. The contract

2. The preapproval or proof of funds for that purchase

3. Any documentation regarding contingency removal for any contingencies that have been removed

4. Any available backup offers

5. A link to the MLS directly for the listing as it would be seen by buyers &/or agents seeing a property from an MLS feed, as long as the MLS feed would include information unavailable on sites like Zillow, i.e. agent only remarks & photo captions.

Escalation Clauses

I and the sellers I work with typically have no problem with REIN escalation clauses & other forms of escalation clauses. If a buyer wants to use one to ensure the existence of an offer, whether as in the REIN escalation clause standard template, or whether written into a VAR offer or other offer, I don't have a problem with that.

1031 Exchange Language

In the event of the seller performing a 1031 exchange, please include the following language in the offer:

"Buyer is aware that Seller intends to perform a tax-deferred exchange under IRC §1031. Buyer agrees to cooperate with Seller in effecting said exchange, provided that buyer incurs no additional costs, expenses, or liabilities as a result."

If competing against other offer types, here are some helpful tips to know in case you're unfamiliar that may influence little tweaks you may want to do for offers, especially if things are close or if a contract difference could have a major impact:

REIN Offers

Repair limit if competing against CVR or VAR offers:

For lower-priced properties than $200k (VAR - and divided by $1k each for certain repairs) or $250k (CVR) properties in cases where you are competing against VAR & CVR offers, keep in mind that the repair limits for items like wells, septic, & termite repairs are higher by default than the 1% of the REIN offer when nothing is input into the section on those seller-paid repairs agreed to up front. I am not aware of provisions in the VAR & CVR contract of seller-agreed to appraisal-required repairs up front.

If using a conventional loan:

While not required, if not using a VAR offer, or another offer that has a provision for it, especially if wanting to increase your chances of winning when competing w/ VAR offers, my sellers would typically prefer striking the appraisal contingency provision or adding a fixed price appraisal guarantee if there's any question about whether the property will appraise or not.

REIN & VAR Offers

While not required, if including a home inspection contingency, & if not using a CVR offer or another offer that has a provision for it, especially if competing w/ CVR offers, one way to increase your chances of winning would be to add the following:

1. The following all together:

   1. Stating that the buyer would not terminate without a list of repairs and approximate costs of those repairs provided by the inspector

   2. Designating what defects would be considered appropriate requests (i.e. actual damage to improvements, not cosmetic, not old systems that work, & not landscaping requests)

Feel free to ask me for quotes of specific language if you don't have access to the CVR contract (not provided here due to copyright restrictions).

CVR Offers

While not required, especially if competing against REIN or VAR offers, one way to increase your chances of winning would be to engage in the following:

• If in association, eliminate paragraph 15 regarding the owners' association repairs contingency.

• If an appraisal is required on a cash purchase, tighten up the appraisal deadline in paragraph 6 to not be as long as 15 days after ratification.

  • VAR offers when an appraisal w/ associated financing is present by default require applying for financing and paying for an appraisal within 5 business days of contract ratification.

  • REIN offers when an appraisal w/ associated financing is present by default require loan application & ordering/paying for the appraisal within 7 days after ratification or 3 days after a home inspection contingency is removed, whichever is later.

CVR & VAR Offers

If you know that certain systems don't work or are in need of repairs, don't forget to strike language (CVR paragraph 24 E for all offers; VAR paragraph 15 C when not contingent on inspection) about certain systems & more being in working order if designated in the contract, unless you are purposefully asking the seller to take care of those before closing.

Even if both parties are unaware of non-working systems etc., one way to increase your chances of winning vs REIN offers, especially if multiple offers are not contingent on inspection, would be to eliminate these same provisions, since these are not present in REIN offers.

For higher-priced properties than $200k (VAR - and divided by $1k each for certain repairs) or $250k (CVR) properties in cases where you are competing against REIN offers, keep in mind that the repair limits for items like wells, septic, & termite repairs are lower by default than the 1% of the REIN offer when nothing is input into the section on those seller-paid repairs agreed to up front.

Changing Contract Provisions

Some of the above information is based on information that may change over time; if you see a contractual error regarding any of the above provisions (especially due to the most likely case of a change over time), please alert Adam asap so that he can revise accordingly.

Probability of Other Contract Types

I take a deep dive into the subject of MLS variance by city/county in the spreadsheet you can find linked in my article on MLS needed in Central, Eastern, & Northern Virginia:

Among house purchases:

• CVR MLS typically has CVR Purchase Agreements

• REIN MLS typically has REIN Standard Purchase Agreements

• BRIGHT MLS typically has NVAR Residential Sales Contracts

• Other locales in Eastern Virginia, or where there's significant crossover, often use the VAR Residential Contract of Purchase

Image courtesy Google My Maps - created by Adam Garrett w/ Garrett Realty Partners from data he pulled

Beyond Initial Offer:

Counters

I dislike when an agent sends a completely new offer after sending another earlier from the same buyer. It's fine to send a few pages that are completely new, but please don't send a fully new offer. Doing so means that I need to spend some time ensuring that what you sent matches what was originally sent minus some likely exceptions, adding time to my task and adding risk to the seller in case something is missed unless I perform a thorough investigation into that which takes a lot more time than isolating a few pages to send to me if they are highly written up. In case you're unfamiliar with isolating pages like that, there are a number of methods, but an easy and free way to do it is to print to PDF with Adobe Reader. If the new PDF is too large to email, you can always send me a link to a Google Drive document like I do, which is also free.

Release Clause Preferred When Inspection(s) Occurred

When I represent buyers, I like to include in any release that the seller may share the inspections that we have provided with other buyers. While I've been on the buying end and not been given that by some sellers, I've never represented a seller who has had an objection to an inclusion of a clause like that.

Related:

• Details For Buyers' Agents When Showing Adam's Listings (see section 10. Other Offers & Deadlines)

• Competing Offer Spreadsheet