INVITATIONS TO OFFER & REVERSE OFFERS - How Atlanta Home Sellers Make Offers to Buyers (instead of the other way around)
By Mary Anne Walser,
Realtor & Attorney, 404-277-3527, maryannesellshomes@gmail.com
When you LIST YOUR HOME for sale, is this an OFFER that a
buyer can accept by agreeing to the terms you present? What does it take for a
buyer to have a binding contract to buy a home? This surprises some people –
but legally, even if you as a buyer offer list price or more for a home, it
doesn’t mean the seller has to sell it to you.
By way of example, let’s say you see a home on the market
for $500,000. You offer $500,000 and do not ask the seller for anything
specifically, other than the property itself – it’s just a clean, straightforward
offer for exactly what the seller is asking for the property. You even offer
CASH and you don’t have to sell something in order to buy, so there’s no
financing contingency. Do you have a contract at that point? NO. Although a lot
of buyers think that it should work that way. Why is there no contract?
A binding contract requires agreement on all basic terms. A
property listing – in this example, the listing that offered the property for
$500,000 – is not an “offer” that can be accepted, because there are many key
terms that are not present. What DATE will you close, for instance? Will there
be earnest money and if so, in what amount? Is there a right to inspect? What
fixtures are included with the property?
Because there is so much that must be determined between the
parties other than the price, the property listing is not an “offer” that can
be accepted – it is what is called an “invitation to offer.” It’s asking for
buyers to make offers, but it’s not guaranteeing that the property will be sold
even if the seller receives a full price offer. Indeed, many sellers
purposefully price the listing at LESS than they would take because they want
to start a bidding war on the property. They hope the low list price will get a
buyer feeding frenzy going and that therefore the property will sell for MORE
than list price.
The listing as invitation to offer isn’t the only
“invitation” the seller can extend the buyer. Many sellers overlook a very
powerful tool for selling their home – the reverse offer.
Here is how a reverse offer works. Say you are eager to sell
your home, and a buyer has been to your home multiple times and is obviously
interested, but is hesitant to make an offer. Have your agent call that buyer’s
agent and find out WHY the buyer hasn’t made an offer. If there are reasons you
can do something about, make an offer TO THE BUYER and get them off the fence.
There were some objections the buyer had that we could do
nothing about. We were a smaller home than the other one they were considering.
But there were some pluses we had that the other listing did not. For one
thing, my listing is right across the street from the awesome neighborhood
park! For a buyer with a child (as this one was) it just doesn’t get better
than that. We were also better priced than the other listing. One thing the
buyer did NOT like was that our floors were scratched up and well worn.
But my seller was motivated to sell and I WANTED THIS BUYER.
There was a great buyer about to purchase in
the very neighborhood where my listing was located. My sellers were moving
out of state and really wanted to be able to go ahead and make an offer on a
home in their new state – but couldn’t do so until their current home was under
contract.
SO, we made a reverse offer. We
offered a lower price and refinished floors PLUS my sellers wrote perhaps the
best reverse offer letter in the history of reverse offers, we came down from
list price a bit, and we offered to finish the floors after closing, but before
the buyer moved in. Here is a revised and edited bit of my seller’s reverse
offer letter, just to give you an idea of what a seller might write in this
situation:
We
are so thrilled that you are considering our neighborhood for your new home. It
truly is a special neighborhood. Our neighbor and friend next door (to the left
as you face the house) is the best neighbor you could ever ask for. He’s quiet,
hosts fantastic happy hours, and is always willing to lend a hand. I’m not sure
you could borrow a cup of sugar from him, but I can speak from experience that
we have borrowed a bottle of wine on occasion! And I hope you took a look at
the great park across the street. I understand that you have a dog - the field
is an unofficial dog park where neighbors take their dogs to run and play after
work and on weekends. Having the park across the street has been like an
extension of our yard and we have made much use of it over the years – and I
hope that you will, too.
We’d
like to offer you a reduced price on the home as well as the promise to
refinish the floors to a stain of your choice. We are relocating and your
timeline works extremely well with our proposed summer move date. We really
feel that our home would be a wonderful fit for you!
Who WOULDN’T want to buy this Seller’s home after reading
that letter? And in this instance, THE REVERSE OFFER WORKED. The Buyer
purchased my Seller’s home rather than the other one she was eyeing in the
neighborhood.
Real estate is an art as well as a science. The key whether
you are buying OR selling is to be flexible, open, and creative!
Mary Anne Walser is a licensed attorney and full-time REALTOR,
serving buyers and sellers in all areas of Metro Atlanta. Her knowledge of
residential real estate and her legal expertise allow her to offer great value
to her clients. Mary Anne is a member of the Atlanta Board of Realtors, the
Georgia Association of Realtors, the State Bar of Georgia and the Georgia
Association of Women Lawyers. Contact Mary Anne at 404-277-3527, or via email: maryannesellshomes@gmail.com.
