You Finally Got An Offer on Your House - Is It Legit?

 You Finally Got An Offer on Your House - Is It Legit?

If you're thinking of selling your home you'll needs to plan how to evaluate offers from those who may inquire.  If your're working with a full service real estate agent they will often do most of this for you.  The responsibility for the decisions made, and the documents signed, will, however,  be yours, not theirs.   

Having an offer to evaluate is, of course, better than not having an offer. You want to evaluate quickly, fairly, and carefully lest you lost the best or break the Fair Housing Laws. 

To start with you need to know that an offer must be written, not spoken in person or on the telephone.  You should simply never directly respond to "What would you say about something like this..." questions.  A prudent answer should be, "Thanks for asking. Please have your agent or attorney give us a formal written offer to purchase that I can have my advisors (spouse, partner, attorney, agent) evaluate it and we'll get back to you."

If they protest that they don't want to bother with that wish them well and see them out.  Many of the ones who will tell you that they don't want to waste your time and theirs with all that formal mumbo-jumbo actually completely understand it all and may in fact actually be trying to talk you into agreeing to something greatly disadvantageous to your best interests. 

Let's assume you actually get a formal written offer.  The three key initial steps are checking what the offer looks like, who prepared it, and how credible the buyers and their claimed financing are.  

An offer is not a so-called "Letter of Intent."  You need to have a complete, good-faith, written offer, with complete identification particulars of the purchasers, and with credible information on the source of their funds and the quality of their financing.  Most offers are prepared by licensed agents or real estate attorneys using standard forms available from your local board of Realtors(r).  

You, or your agent (or attorney), should have already identified all currently required seller disclosures and made them available to potential buyers.

All pages need to be present and legible for all required standard contract forms, addenda, and required local disclosures.  Blanks need to be filled in.  Pages need to be initialed, dated, and signed in spaces indicated. Any changes or additions to the pre-printed, so-called "boilerplate" text need to be initialed.

The next step is verifying that whomever prepared the offer is either a currently licensed real estate agent or a real estate attorney licensed to practice in your area.  You should verify that agents (or attorneys) have active, current licenses, and are currently affiliated with whom they claim to be with.  It is worth reviewing the official list of grievances or disciplanary actions against that agent posted in the state's records.  It is also worth knowing how many homes sale transactions this agent has participated in during their career and what fraction of them involved buyer representation vs seller representation.  This research takes scant minutes for an experienced listing agent and should always be done prior to presenting you an offer.  

Pay attention to whether a buyer surname is the same as the name of their agent, loan officer, or title company person. If the offer preparer is related to the buyers by blood, marriage, adoption, or shared business interest this must be formally disclosed. We check for these exceptions because we have received incomplete offers, offers from unlicensed parties, offers from agents with revoked, inactive, or suspended licenses, offers from agents working for a different brokerage than claimed, and offers from agents with multiple public grievance filings.  We have received offers prepared by undisclosed family members or business partners of the buyers.

The thirdstep is verifying the identification particulars of the buyers making the offer and evaluating the credibility of their sources of funds. A blank buyer name, or "To Be Determined LLC" or "... and Assigns" proposes creation of an unenforcible contract which we will advise our clients to avoid.  We have discovered buyers using fake names, "doctor"s without medical licenses, buyers with federal fraud convictions, and so forth.

With cash transactions the cash needs to be in a US bank account where it has been for a while, not moving amongst a handful of accounts rapidly.  Although rarely seen, buyers with large amounts of currency not in the bank present exceptionally high risk of that cash being seized once discovered by federal authorities.   With financed transactions we prefer to speak to the buyers lenders directly to confirm that they know who these people are.  It is all too easy to manufacture a fraudulent pre-approval letter or bank statement these days.

Most buyers are not frauds. Many by-owner sellers succeed. Many questions have perfectly acceptable answers.  These platitudes are cold comfort, however, once you have clouded your home's title by placing it under contract and then discover that the buyers are not whom you thought they were.

For a free, no obligation discussion of your options and opportunities please just call us.

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