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Spirit Messingham's Blog

By Spirit Messingham | Agent in 85716

Purchase Contract-How much time do you give the seller to react?



Every single real estate transaction is different.  In the current market, how much time do agents give the seller to accept or counter the purchase contract?  For me, it depends a lot on the situation.  In most cases I like to try and slam the door shut as quickly as possible for my client, moving the property to Active Contingent before more offers come in.  However, dealing with Sellers you don't want them to feel rushed or pushed into a corner either.  When submitting to REOS, not really sure if it matters, as the majority of them seem to react at their own time, speed, and will.  Meaning, in a typical REO contract we will give them 5 days and never hear back from the listing agent.  Sometimes up to two weeks later receive the banks paperwork, once we signed and get that back to them, then they send over a copy of the signed contract.  Part of the process of dealing with banks and REO's in general.

Would like to know other agents thoughts, if they have a standard amount of time they write on all purchase contracts or does it depend more on the situation? 

Comments

By Heather,  Sat Jan 22 2011, 09:28
You're right....when it comes to REO's, they don't play by our rules, for sure, so I allow a week, and explain to clients they will respond on their own time.

As far as a normal seller, this depends on my client's request, as we simply are facilitators in writing the contract with their wishes, therefore, I will ask the client how much time they'd like to give the seller to respond. Currently, in our market, the average time is 2 or 3 days, but this request is completely up to the client making the offer!

I'm happy to advise folks on what the current market will bare, however, the decision on their offer, terms and timing is strictly up to them!

I write what the client asks, it's never my decision.
By Spirit Messingham,  Sat Jan 22 2011, 09:35
Yes, yes, I agree Marla. However, since we write purchase contracts more than they do, clients do tend to ask us our opinion on how much time to allow a counter and etc. Thanks for the input, appreicate it.
By SHIRAZ,CRS,CIPS,MBA,,  Sun Jan 23 2011, 14:54
Since, our modus operandi has changed with REOs, and short sales, I usually go with an "open ended"-
time limit, as putting any time, will be futile anyway--as Maria has indicated.So give the sellers a limited time,
and if your buyers get tired of waiting or have found a new listing, then,just cancel the current offer and proceed with the new one--
By Heather,  Sun Jan 23 2011, 17:28
Yes, clients always ask our opinions, for this and for the asking price and for EVERYTHING.

I won't offer my opinion, I will give them their options, in fact, I'm currently writing a CE course titled, "Options, not opinions"....

For instance, my opinion in this situation would be, "I'd give them 3 days as most people in this market are giving 2 to 3 days"

On the other hand, I believe we should be giving them their option, which would be, "How long would you like to give the Seller to respond to your offer? In this market, 2 to 3 days is the standard, but the time you give them to respond is 100% up to you."

Then we discuss their motivations in regards to this property and any others they are looking at. In some cases, they choose to give less response time, as they are not that motivated to buy this house and they want to move on if their offer is not accepted, as there are several others they're looking at. Other times, they choose the 2 or 3 days, and then other times, they feel the Seller should have several days.

We won't go into the REO's, as those Sellers don't play by our rules anyhow, so a buyer can choose any timeframe, and the REO will respond in their own good time! (sadly!) :-)

In regards to "Options, not opinions", I've heard from clients that many agents don't even inform them (in Counter Offer situations) that one of their options is to "walk"/reject. When the buyer requests the agents' opinion of what to do in a Counter situation....the agent simply says, "I'd Counter somewhere between $XXX and $XXX".

The truth....

You have 3 options:

1) You can sign the Counter, and you'll be going to escrow, closing in 30 days.
2) You can reject the Counter and walk.
3) You can Counter with another price/terms to your liking (keep in mind in Countering, they could reject and also others can come in with another offer during this time).

These are the clients OPTIONS, not my OPINION......even though they always ask for my OPINION.

Clearly, an issue I'm passionate about!

It's hard for agents to do this, as it's human nature to want to speak their "opinion", but for the best interests of the client, it's my OPINION they should be given their OPTIONS over our OPINIONS!! :-))))

Happy Selling Spirit! I love your NAME!!
By Spirit Messingham,  Mon Jan 24 2011, 06:55
I feel it is part of our job to share our experience & knowledge. I do offer options but for the first time home buyer that might want to make an offer & give the seller a month, I explain the + & -s to giving the seller that much time to make a decision. I understand the difference, it is not my offer, it is theirs. We know what has a tendency to work, what is efficient and thus increasing their chances of the desired outcome.
By Timothy M. Garrity,  Mon Jan 24 2011, 07:14
A few days, at most; but it definitely depends on the situation.

TG
By Kevin Olson & Jessica Laude,  Mon Jan 24 2011, 07:23
On REOs putting a timeline in is something I only do if the buyer specifically requests it. The time gives them a sense of control, however in nearly every instance we just end up with more paperwork to extend the deadline because they make little difference. I don't suggest an amount of time unless the MLS has information dictating deadlines and/or time allotment for responses.
By Spirit Messingham,  Mon Jan 24 2011, 10:49
Yes Kevin I could not agree more. I put a date, at their request but I explain to my buyers that we very well may not hear from the listing agent nor the bank for a period of time after the contract technically expires. Banks move at their own speed, and if you still want to move forward of course they can, even though the bank responded after the deadline. Thanks for the input, appreciate it, and good luck out there!
By Joan Reich,  Tue Feb 1 2011, 22:20
I typically recommend a 24 hour response time for a purchase offer, unless there are some extenuating circumstances. REOs are, of course, a different story. It depends entirely upon what investor is involved. Bank of America has been responding very quickly lately. recently, they responded on the same day we submitted the offer.
By Spirit Messingham,  Wed Feb 2 2011, 16:23
Can't beat same day, that is awesome.
Every offer is different but on average I would say 24 to 48 hours is the norm. If we know the seller is now living in another town or there are other issues that would slow down the process we might recomend a longer time. With REO's it's anyone's guess.
By Sarah Goulart Nathe,  Wed Feb 2 2011, 17:23
For a 'normal' sale (as if any are normal) where the seller is the homeowner, I give either 24 or 48 hours. For REO properties, I would give 3-5 business days. For a short sale, I start with 30 days, knowing that this may still require an extension.

That being said, every transaction is different and may require a different timeline.
By Spirit Messingham,  Sun Feb 6 2011, 07:57
I tend to give all the same, of course, whatever my client(s) wants. Just that I set up the expectations that REO, if they accept will reply probably days after whenever we give them, with their own set of paperwork that must be filled out. On Short Sales I feel it is important to get the seller to sign right away or soon as we can, then the waiting begins as banks are taking up to 6 months. Finally, on homeowners it is hard cause you dont want them to feel backed into a corner but at the same time, hate to get another offer in & a bidding war errupts.

Thanks for the comments.

POST
 
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