Put It In Writing!

You've found your clients' dream home but they are just about to leave for a long-awaited vacation. You get them to quickly come down and see the house and your instincts were correct: your clients love the house! However, they are in such a rush to leave on their trip that they ask you to put in a verbal offer instead of a formal written one. Unfortunately, you give the seller's agent a verbal offer and by the time your clients come back from vacation, their dream home is now owned by someone else. Has this happened to you or a client? Let's make sure that doesn't happen again! Since the verbal offer wasn't written it cannot be held as a legally binding offer; therefore, the seller will be more inclined to go with a written offer as a guarantee.

As you know, purchase offers include legal documents that handle all aspects of the sale running the gamut of items included from the sellers' personal property (i.e. furniture) to the closing date of escrow, and all inspections and financial arrangements. Counteroffers are commonplace and part of the negotiation. However, keep in mind that the seller may be considering other offers simultaneously. The property is still up for sale until all documents are put in writing and signed. Therefore, verbal offers carry little weight. We all know that timing is everything in real estate. Since speed is of the essence, facsimile signatures are usually binding, provided that the signer plans on signing the original documents when they have the chance. Also, signatures can come from two different people at different times if, let's say, a couple is apart due to business travel. The faxes must be legible and the signer must understand what it is they are signing.

One other thing you can suggest to your client is that if they are unable to be present during the critical stages of the purchase, they can give power of attorney to a family member or friend, but this power of attorney MUST be legal and notarized. It is recommended that as your clients' agent you are not also your clients assigned power of attorney there is conflict of interest when your commission is part of the transaction. Authority letters administered, giving you negotiating power for your client, but be aware that these letters are not always legally binding. Even though authority letters time during negotiations, your client still may lose their dream home because the offer letter is not properly signed. Also, be advised that email is not an appropriate means of communication in transaction, as it is neither signed nor considered legally binding.