When making an offer, many underestimate the power of deal presentation. In the current climate where there’s more demand than supply available, any action that you can take to have an edge over other buyers is critical. In today’s video, Eric shows how to make a strong offer.
Speaker 1: Why is deal presentation so important?
Eric: It’s so important. It’s very important right now. So things are a little bit slower right now, but I think things are slower now not because the real estate market is soft, but because there’s so little for sale. There’s so little inventory. So because the real estate market is so hot, we’re often in a multiple offer situation. You’re representing buyers. You want your offer to stick out amongst the group. What real estate brokers need to know is their offer presentation is a reflection of how they work. I don’t know why other people don’t take this into consideration. I mean, my kids like to say, “Dad, you were born back in the 1900s.” Yes, I was. It’s not the 1900s anymore. I mean, handwritten offers are cute, but come on. We’re a little bit beyond handwritten offers.
Speaker 1: I would not have got my last house without your tips.
Eric: That’s what I like to hear. Yeah. That’s what I like to [inaudible].
Speaker 1: And the agents at the beach where I was buying have absolutely no idea. I feel like I knew more about it than they did.
Eric: Good, good. That’s awesome to hear.
Speaker 1: They’re like, ah, you don’t need due diligence money.
Eric: You certainly do. You certainly do. Yeah. Yeah. So I mean, one of the big things, there are mistakes in the contract. I mean, you’re giving me an offer and you spell my seller’s name wrong? You’re like, “Ah, Eric, what difference does it make? It’s one letter or I forgot this or whatever.” It makes a difference to the seller. If there are 10 offers before them and this broker spelled the seller’s name wrong, it really makes the seller angry. People need to realize that.
Did you include all the people on the deal? You want to get somebody mad, forget a spouse. I told you there’s two spouses on the deed. I told you there’s two spouses on the seller. Two spouses signed the disclosure and then you give me an offer and it says Mr. Smith, that does not go over well with Mrs. Smith. You really put yourself in a bad situation.
You give me a cash offer and you don’t send me proof of funds, you’ve showed me the level that you play at. If you give me a cash offer and you bring me proof of funds, I know what level I’m dealing with. Some of this stuff is so obvious. You give me a pre-qual letter, it’s a $400,000 piece of property. You give me a pre-qual letter that says $320,000, you’re missing. Oh, it’s okay. He has the 80,000. All right. Well, you should have had your letter right. It probably is okay, but it’s just a level of how you’re playing the game.
I can’t stand blanks on an offer to purchase. They might be irrelevant, but let’s put none, NA, zero. I don’t like blanks. Those should be filled out. Other little things. It’s a VA loan. Okay. It’s a VA loan and you have a VA approval letter and you checked off on the contract that it’s going to be… You filled in in the financing section that you’re going to do a VA loan and then you haven’t attached the VA addendum. Well, you have to. It’s a requirement. You want the VA addendum.
So it’s just sloppy stuff like that. Is the math right? It’s $200,000 purchase price. It’s $10,000 DD money. It’s $10,000 earnest money and you have 170,000 on the bottom and everything. It’s just stupid, sloppy math, but it happens all the time. It’s usually more complicated numbers that people make a mistake, but we check those things.
Does the financial section reflect… We kind of went over this, but does the financial section reflect the pre-qual letter? So you put in there that they’re getting an 80/20 loan, but your pre-qual letter tells me they’re getting a 95/5 loan. It doesn’t match. So there’s something wrong. Sloppy. Here’s one that’s really, really picky but if we’re trying to make the best offers or whatever, did the buyer’s agent fill out my information on the listing broker’s side? They’re not required to, but at the last page of the contract or near the last page of the contract, there’s a section for the buyer’s agent information and then there’s a section for the listing agent information. Well, the buyer’s agent information’s always filled out because they know it. They know what their number is. They know what company they work for. They know their email, blah, blah, blah. But they might not have mine memorized. Well, it’s all out there. It’s public information and so when I see an agent that’s filled out mine again, I know I’m dealing with an agent that’s going to cross the Ts and dot the Is.
Do they understand tax deferment? Have they ever sold a piece of land before? Have they ever sold a house like this before? Do they understand Chatham County permits? That’s the biggest thing. Oh, your client put this porch on 10 years ago and you don’t have the permits. Nobody’s got the permits. Chatham County doesn’t hold onto them for more than six years. That’s a lot different than Wake County so it’s hard for people to know that.
Then here’s another good one too. What type of questions did they ask before the offer is actually sent? So if they call me and go, “Eric, what were you thinking with the way you painted that living room? We think that roof is kind of suspect and they’re very concerned about the drainage in the front yard.” You’re done. In this market, you’re out. I’m already dismissed you. You’ve asked questions that I don’t like. If I have a pile of offers in front of me, that’s a pain in the ass agent that, I mean, you’re out. Your buyers are out because you ask too many questions and it’s not always going to be like this. This is real, real picky times but if you want to be pick of the litter, that’s not being pick of the litter. Just keep your mouth shut and don’t ask questions like that, that are indicating that you’re going to be difficult to deal with in the repair negotiation process.
Yeah. Where are your comps? How did you come up with this price? That’s a bad sign. How did the offer get to you? You talk about deal presentation. When I have an agent call me and say, “Hey Eric, this is Susan. I just wanted you to know I’m about to send you an offer.” “Thank you, Susan.” Let’s say they don’t get me. I’m with another client. I’m doing videos. They’ll text me. “Hey Eric, I just want to let you know I sent you an email.” Good. This is real good. I’m going to like working with this agent. I just get an offer from an email and there’s no advance, there’s no notice there’s no nothing and everything. What kind of world do we live in that you’re so busy that you can just send an offer, not have any communication? That to me is not good deal presentation.
The other thing that people have a real, real tough time with, I don’t know why they have a tough time. You make me an offer $450,000 house, $40,000 due diligence money. I’m going to say to you, “Steve, do you have the due diligence money in your possession?” “No, he’s in New York right now. He’s going to FedEx it to me.” No, that’s not as good as somebody says, “Yes, sir Eric, I have the checks right here. I’m going to send you copies with the offer.” I like that. I know I’m dealing with a good agent.
Speaker 1: So I had to insist on that the last several offers.
Eric: They didn’t want to do it. They said it was nothing. They said it was not necessary.
Speaker 1: [inaudible] whoever you referred or somebody like that. I’m like, “I got to get the check in your hand to submit with the offer.” They’re like, “Oh, it’s not a big deal. It doesn’t matter.”
Eric: It matters. It matters and it’s just one of those little things in a culmination-
Speaker 1: I wouldn’t accept an offer without a check in hand.
Eric: Yeah. Yeah. When I don’t have the check in hand, I need to tell my sellers. I go, “Just so you know, are you okay with this?” I can tell you, it’s been several years that we’ve been doing due diligence now, there’ve been a couple times where the agent got left on the hook because the buyer never came through. They changed their mind. You got a contract. You owe that money. I mean a contract’s a contract. That’s your word. You said this is what you’re going to do and you’re like, ah, I changed my mind. Doesn’t cut it in real estate. You can’t be like that. So a clean, well written offer with good communication is very important to the sellers and the listing broker.