Best Practice Offer Letter

Schwarzwald

TheJP said:

Schwarzwald said:

user1977 said:

Schwarzwald said:

user1977 said:

Schwarzwald said:

Laying out the conditions upfront is market standard 

You seem to be getting a unanimous response to the contrary! What happens in other asset classes (or indeed in this asset class in different jurisdictions) is irrelevant.

having spelled out these conditions upfront, was helpful for me when later reverting back, e.g. one property had damp and another had JKW, so I felt it was easier to justify a request for price reduction.

It wouldn't really have made any difference. Only a completely potty vendor would have demanded that you keep to the same price irrespective of (surprise) damp or JKW.

Lots of dodgy and greedy vendors in real estate, I would prefer to know as early as possible that I am dealing with a potty vendor so make it clear that I will reduce the price if they are hiding an issue. Might not accept my offer for that reason, so time and money saved.

Any way, consensus seems to be it is not market standard, at least I learned that. Thanks everyone

What if the surveyor finds something (vendor may or may not have known about it) but still values the house at what you are offering? There are potty vendors out just as there are potty buyers...

I personally dont look for my surveyor for price guidance, so their perspective on what I should offer is of secondary importance to me.

if it is minor (there will always be things coming up), I probably would not do anything.

if I deem it significant, I would raise it with the vendor, in line with what I told them upfront that I would do so.

KievLover

Schwarzwald said:

I would be interested to hear how people make their offers on residential properties and what they would consider best-in-class?

• Do you just call the EA and tell him the number?
• Do you send a short or rather formal email?
• What do you put in beyond the number?
• Do you attach any supporting information, like additional background on your person and purchase situation?

So far, I have sent a rather formal, well structured emails, laying out the offer price, how I derived at the price, information on my person and situation as well as why I believe this is a good offer and I am a good buyer.

Plus I attached conditions to my offer, e.g. offer is only valid for 72 hours, acceptance of offer must result in property being taken off the market, offer is made on the basis that the property is in good and sound conditions, without any material or structural issues, I am being granted access at least [x] times between offer acceptance and exchange, etc.

 Which other conditions do you include, if any?

 Feel free to share your best-in-class offer emails (without the sensitive details) or templates that you might use.

 cheers

 

I wouldn't sell to you because you're a pain in the !!!!!!. I feel qualified to say this because my mind is similar and I would like to behave in exactly the same way as you, to mitigate risks and to avoid wasting my time. These are all thoughts and questions that have gone through my head that I'd like answers to sooner rather than later, too. 

However, it's just not the way to behave in a seller's market. You (and theoretical I) will be seen as troublesome people to sell to, with many demands and stipulations, before the process has even begun. Part of me says: it shows we're organised and serious, and that, I think is also true, but other people just see it differently. My highly function autism isn't received well by people who are far more laid back. 

Moderately sell yourself during the viewing to the vendor and put a one line email offer in without qualifying how you reached that conclusion. Remember, the more the vendor and EA know about you, the more they have to use against you. They can still argue the toss about everything you have claimed re: your conclusions on value, and it won't make any difference at the end of the day, anyway.

Go in casual and you can up your demands at a moderate pace over time once your offer is accepted.]

If I were a seller and was told 'I want to visit five times' I'd think 'Christ, what? No!', but the reality is, if you wanted to visit twice and then, over time, visit with a plumber, electrician and builder, I'd see that as reasonable due diligence and wouldn't object in the slightest. It would still be five visits, but when not demanded in advance, they feel reasonable. 

I totally get where you are coming from, but the way we want to behave is just not the way to behave in a current market. 

I also have a list of more than 45 questions to ask on (2nd) viewings that I take to mitigate some of these risks. It means sod all as none of the answers are legally binding, but I have found that with some of them being unexpected, vendors have been pretty honest due to not having answers pre-prepared in their heads.

TheJP

Schwarzwald said:

TheJP said:

Schwarzwald said:

user1977 said:

Schwarzwald said:

user1977 said:

Schwarzwald said:

Laying out the conditions upfront is market standard 

You seem to be getting a unanimous response to the contrary! What happens in other asset classes (or indeed in this asset class in different jurisdictions) is irrelevant.

having spelled out these conditions upfront, was helpful for me when later reverting back, e.g. one property had damp and another had JKW, so I felt it was easier to justify a request for price reduction.

It wouldn't really have made any difference. Only a completely potty vendor would have demanded that you keep to the same price irrespective of (surprise) damp or JKW.

Lots of dodgy and greedy vendors in real estate, I would prefer to know as early as possible that I am dealing with a potty vendor so make it clear that I will reduce the price if they are hiding an issue. Might not accept my offer for that reason, so time and money saved.

Any way, consensus seems to be it is not market standard, at least I learned that. Thanks everyone

What if the surveyor finds something (vendor may or may not have known about it) but still values the house at what you are offering? There are potty vendors out just as there are potty buyers...

I personally dont look for my surveyor for price guidance, so their perspective on what I should offer is of secondary importance to me.

if it is minor (there will always be things coming up), I probably would not do anything.

if I deem it significant, I would raise it with the vendor, in line with what I told them upfront that I would do so.

Really! Their guidance is what you pay for and more importantly is the bargaining chip when negotiating.

caprikid1

OP How many properties have you purchased and how many offers have you submitted to get there ?

Schwarzwald

TheJP said:

Schwarzwald said:

TheJP said:

Schwarzwald said:

user1977 said:

Schwarzwald said:

user1977 said:

Schwarzwald said:

Laying out the conditions upfront is market standard 

You seem to be getting a unanimous response to the contrary! What happens in other asset classes (or indeed in this asset class in different jurisdictions) is irrelevant.

having spelled out these conditions upfront, was helpful for me when later reverting back, e.g. one property had damp and another had JKW, so I felt it was easier to justify a request for price reduction.

It wouldn't really have made any difference. Only a completely potty vendor would have demanded that you keep to the same price irrespective of (surprise) damp or JKW.

Lots of dodgy and greedy vendors in real estate, I would prefer to know as early as possible that I am dealing with a potty vendor so make it clear that I will reduce the price if they are hiding an issue. Might not accept my offer for that reason, so time and money saved.

Any way, consensus seems to be it is not market standard, at least I learned that. Thanks everyone

What if the surveyor finds something (vendor may or may not have known about it) but still values the house at what you are offering? There are potty vendors out just as there are potty buyers...

I personally dont look for my surveyor for price guidance, so their perspective on what I should offer is of secondary importance to me.

if it is minor (there will always be things coming up), I probably would not do anything.

if I deem it significant, I would raise it with the vendor, in line with what I told them upfront that I would do so.

Really! Their guidance is what you pay for and more importantly is the bargaining chip when negotiating.

You are partly right.
i pay for their guidance on value, but not on price.
value and price are two very different things.
and on price, I decide by myself.

Schwarzwald

@ caprikid1:

As stated earlier: 3/4 offers got accepted. I actually never had negative feedback on the offers so far, which is why I am slightly surprised about the rather negative feedback here. Even the EA I had the impression rather looked at the offers in a v professional and serious way.

out of the 3, I completed 1x, 1x I pulled out due to findings, and 1x is still in process.

All 4x offers were in 2021 and all 4x were below asking price, ie also the 3x which got accepted were offers below asking price and with conditions similar to the ones described. And no, these were not properties that nobody wanted.

Schwarzwald

KievLover said:

Schwarzwald said:

I would be interested to hear how people make their offers on residential properties and what they would consider best-in-class?

• Do you just call the EA and tell him the number?
• Do you send a short or rather formal email?
• What do you put in beyond the number?
• Do you attach any supporting information, like additional background on your person and purchase situation?

So far, I have sent a rather formal, well structured emails, laying out the offer price, how I derived at the price, information on my person and situation as well as why I believe this is a good offer and I am a good buyer.

Plus I attached conditions to my offer, e.g. offer is only valid for 72 hours, acceptance of offer must result in property being taken off the market, offer is made on the basis that the property is in good and sound conditions, without any material or structural issues, I am being granted access at least [x] times between offer acceptance and exchange, etc.

 Which other conditions do you include, if any?

 Feel free to share your best-in-class offer emails (without the sensitive details) or templates that you might use.

 cheers

 

I wouldn't sell to you because you're a pain in the !!!!!!. I feel qualified to say this because my mind is similar and I would like to behave in exactly the same way as you, to mitigate risks and to avoid wasting my time. These are all thoughts and questions that have gone through my head that I'd like answers to sooner rather than later, too. 

However, it's just not the way to behave in a seller's market. You (and theoretical I) will be seen as troublesome people to sell to, with many demands and stipulations, before the process has even begun. Part of me says: it shows we're organised and serious, and that, I think is also true, but other people just see it differently. My highly function autism isn't received well by people who are far more laid back. 

Moderately sell yourself during the viewing to the vendor and put a one line email offer in without qualifying how you reached that conclusion. Remember, the more the vendor and EA know about you, the more they have to use against you. They can still argue the toss about everything you have claimed re: your conclusions on value, and it won't make any difference at the end of the day, anyway.

Go in casual and you can up your demands at a moderate pace over time once your offer is accepted.]

If I were a seller and was told 'I want to visit five times' I'd think 'Christ, what? No!', but the reality is, if you wanted to visit twice and then, over time, visit with a plumber, electrician and builder, I'd see that as reasonable due diligence and wouldn't object in the slightest. It would still be five visits, but when not demanded in advance, they feel reasonable. 

I totally get where you are coming from, but the way we want to behave is just not the way to behave in a current market. 

I also have a list of more than 45 questions to ask on (2nd) viewings that I take to mitigate some of these risks. It means sod all as none of the answers are legally binding, but I have found that with some of them being unexpected, vendors have been pretty honest due to not having answers pre-prepared in their heads.

yes, seems we are on a similar page.

Obviously one cannot be ignorant to the (i) market conditions one is in, and (ii) the profile of the vendor.

Most sensible thing to do potentially going forward is to simply ask the EA if they/the vendor just likes to know a number or more elaborated offer.

It might be indeed that a non-sophisticated vendor might feel overwhelmed by a too elaborated offer with conditions etc. They might just want to hear a price. 

In a fully professional (B2B) setting this is obviously different, and I might have been a bit ignorant to that fact given I come from that rather professional (transaction) background and blindly applied it to a C2C house purchase.

warby68

You've nailed it in the last post

Treating it as b2b with your offer being pretty much a contract is generally not the done thing for resi property at the offer stage. Its relatively informal for the most part at this stage, short phone calls and emails/confirmations - conditionality usually limited to removal from market and if there is anything extra included or otherwise as part of the offer. Phone calls are good because you can get the agent onside if they like you - that can help - but I'd follow up by email.

Curious why you are asking if you are happy with your success rate and haven't had any adverse feedback elsewhere?

Semple

I'm assuming you've never purchased a property before, as what you've described as your actions certainly do not sound the norm. 

As another poster had put it, you don't want to come across as awkward or difficult, especially in a buyers market where you're likely competing with several other interested buyers.

There's been a few good replies on what you shouldn't have included, so I won't repeat that.

Schwarzwald

warby68 said:

You've nailed it in the last post

Treating it as b2b with your offer being pretty much a contract is generally not the done thing for resi property at the offer stage. Its relatively informal for the most part at this stage, short phone calls and emails/confirmations - conditionality usually limited to removal from market and if there is anything extra included or otherwise as part of the offer. Phone calls are good because you can get the agent onside if they like you - that can help - but I'd follow up by email.

Curious why you are asking if you are happy with your success rate and haven't had any adverse feedback elsewhere?

No particular reason beyond my own curiosity, I was wondering about the “how to” right from the beginning, but simply never had somebody to ask how they do it until I came across this forum and somehow today I posted the question.

also, one obviously builds a rapport with an EA over the 1-2 viewings before making an offer and hopefully is able to establish that one isnt a painful buyer, just a very structured one - but that might also be in the eye of the beholder