Tag: precision drafting

The solution to overpaying is in the Offer.

Price is a one-time thing; security lasts longer

Two lines is all it takes to include a price in an Offer. The remaining 579 are dedicated to the rules of the transaction, and the promises made with exceptions. On price alone an Offer might be judged good or bad. It’s the easiest condition to see and when it’s good, it shines like a bright star. So bright in fact that a person may overlook the essential aspects of the Offer. Rules and caveats are ignored at great peril. Price is a one-time thing; security lasts longer.

Getting the most money in the shortest amount of time is said to be the goal of home sellers, and maybe it is until we have more information. When we take the time to look at the ‘more information’ we discover that security, not price is the overriding factor in negotiations. Price being objective ($100 is greater than $50) is simple to see. Security is subjective. (A $100 bill today that I can never spend is not as appealing as a $50 bill I can spend in a week.) It’s harder to see but becomes clear when we know what the rest of the words mean.

Real estate transaction drafting is primarily a trained practice. When working with a practitioner trained to insert this here, that word there, and cross this off but not that, the client is left looking just as unprepared and insecure as the next person. A wise seller will not get tied up in an uncertain contract. A big price won’t distract them from the clutter of the Offer.

On the other hand, the person working with the professional who understands that the contract is filled with qualifiers, exceptions, caveats, and cautions will have more to offer to appeal to the desires of the seller. Price will always be a factor, but it’s not the only factor. It is in the lack of conditions where buyers are given a chance in highly competitive markets. Knowing how to structure Offers is a skill under developed in the world of fill in the blank and check the box, one-size-fits-all, standardization. At Essential Real Estate we made it our business to know the conditions of the contracts so our clients can make informed decisions about what goes into their contracts, and what is left out.

Know THE Objective. Know the Contingencies. Precision Draft the Offer.

Before we  draft offers we better know the overriding objective of the client.  (There can be more than one objective, but only one that is do or die.) If that Objective is something subjective, such as “protect me”, we could discover what “protect me” looks like to the client.  What I fear is not the same as what another person fears. I need to know what they want to be protected from and be sure the protection I am suggesting is not protecting them from fears of my own and diminishing their offer.

What could the client’s goal be?  Get my offer accepted is one goal. Is it overriding? If it is, we better know what the contingencies we suggest look like to the people  on the other side of the table.  If the objective is to protect me from whatever could go wrong, we can do that so well that the offer is unacceptable to the Seller.

There  is a balance in most cases. Once accepted the objective may change to something subjective, but inserting protection without the client having  the opportunity to decide before the Offer is submitted is a sure way to contribute to having an otherwise acceptable offer rejected.

To know a person’s overriding objective, we have to (1) Ask questions about the client’s risk tolerance. (2) Know  what the different contingencies do and don’t do. (3) Have a dialogue about choices to strengthen or weaken the chance of accomplishing the client’s objective.  Once we know what matters most to the client we can begin precision crafting of an offer with the objective in mind.