If you are planning to make an offer on real estate then remember that real estate offers must be in writing to be enforceable. Period!
Although the real estate sales contract process is different around the U.S., having the terms on paper is the essential first step. The contact price, financing terms, closing date, and contingencies build a framework to achieve the common objective of selling the home.
One addition should be a deadline for the seller to respond to the buyer’s initial offer. In Northern Virginia, the Regional Sales Contract does not have boilerplate language that requires either party to respond during the offer/counter-offer process. The contingencies have time frames, but until the contract is “ratified” neither party feels the pressure of the clock.
Yes, a deadline for your real estate offer is important
Deciding on a deadline will depend on your local real estate market. For example, right now the Vienna, VA real estate market for detached homes is “hot” (March 2011) with home buyers competing for homes. This is because of a supply shortage in the 4 bedroom, 2 bath, 2 car garage category. Yes, we are looking at a “seller’s market” where home sellers have a certain amout of control over the negotiation process.
“Submit Final & Best Offers by 9 PM on Tuesday”
In contrast to my local market, there are real estate markets in Florida where there is an ample supply of attractive homes for sale. This is a classic “buyer’s market” where a well qualified home buyer can call the shots.
In my opinion, common sense requires that any offer should be responded to in a “reasonable” time frame… but that depends on the local absorption rate. If new listing are getting offers the first weekend then getting a response may be withing 72 hours. But this scenario may give the seller an impression he can “shop the offer” to try and milk it for a better one, a real gamble because most buyers hate bidding wars and may pull their offer if they feel exploited. If you feel this case, modify your offer with a firm deadline, like Thursday March 3, 2011 @ 5:00 p.m.
What is the absorption rate in your local real estate market?
In my experience, offer deadlines don’t work for short-sales or foreclosures. Hey, you are dealing with a bank… I think that explains it well enough.
If you don’t put in a deadline and there has been no response from the seller, then ask to get acknowledgment that your offer has been presented to the seller. With so many people traveling these days, you may find out that the seller is on a cruise ship in the South Pacific, or dealing with an ailing spouse or is trying to reach his brother (the joint owner) who lives in Montana. There are many “reasonable” scenarios and you will have to judge the validity of each.
So, consider putting in a deadline depending on your current real estate market or background information that your agent has discovered. You can always adjust dates in an offer, withdraw an offer, or know that once the offer deadline expires you can pursue another property.