How often do you entertain verbal offers?

Sadly enough people don't seem to understand that an offer is just an offer and is not legally binding unless it is in writing.  There is a reason we no longer do business on a handshake and a nod. 

Hi Scott - like you, I convey a verbal offer, but no action is taken on it until and unless it's put in writing.  Someone who's not willing to put pen to paper must not be a serious buyer, at least not in my opinion.  We all know that verbal means nothing and doesn't hold up for either party.  Sure, some people consider their word to be all that's needed, but a court won't look it that way.  There are too many possible terms in an offer for verbal offers to count for anything serious

I have, on ocassion, floated a verbal offer by a listing agent to see if we're the realm of possibilities when my buyer has insisted.  If it's within that realm, I get that buyer into the office to put pen to paper to be considered a serious buyer and a serious offer.  But without it in writing, it means nada.

Ann

Scott - I handle verbal offers very much the same way you do.  Right now I have a licensee who is interested in one of my listings for his daughter, he ran a verbal scenario by me that I relayed to the seller.  The seller and I said put it in writing... WITH THE DETAILS and we will give you an answer.  I still haven't gotten this OFFER and I should be getting a written offer from someone else today.  Verbal offers are useless.

Scott, serious buyers will put their offer in writing. As you found out with this verbal offer, all it did was take up your valuable time. "Talk is cheap!"

Good Post!

Most verbal offers are price only and no terms.  Thing is that it is faster to deal with a written offer containing all terms than it is to talk them out, make sure they are straight, get the seller on board...............

Scott,

I don't do verbal offers, you have nothing!  If they can't put it in writing, they are not buyers!

I presented a verbal offer to one of my sellers last week.  The entire reason was due to a 3 month wait in closing and the buyer wanted to make sure that was ok with the seller.  The seller agreed to it and we wrote a contract yesterday.  There is a difference between being reasonable and just being unreasonable.

This buyer is truly misunderstanding the process...since an offer has to be in writing eventually then your seller could say yes and then turn around and say no.  Tell the buyer that and maybe they will get the idea that an accepted verbal offer has no teeth.  If they don't want to use a contract, do a Letter of Intent first and then summarize it on the contract.  Bottom line is it must be in writing.

You have an obligation to present the verbal offer, but your seller has no obligation to respond. All you have to tell the buyer is that his verbal offer was presented, and there was no response. Nothing else the buyer says after that matters, regardless of protestations.

I DONT do verbal offers. Can anyone say litigation. But again in this market people are desparate and desparate people do desparate things.

I can see why a verbal offer is good in order to get an idea if it's worth it to go through the time it takes to put it down on the paper contract.

But if a so-called buyer won't then actually do that, as you say, what's the point?

Does buyer think a verbal is going to get him the keys to the house?

I don't respond well to verbal offers either. Nothing is more solid and reassuring to the sellers than a bona-fide written offer.  When agents or buyers try to feel out the situation by throwing out a verbal offer, it's usually followed by, "We don't want to waste our time writing up an offer if the seller is not going to accept it".  That communicates to me that the buyer just isn't serious about the property.

Plus, we all know that when a seller actually has an offer in his or her hands, it's potentially a step forward no matter how low the offer is.  Verbal offers are a total waste of time and energy in my opinion, unless of course, as mentioned above, it's to feel out the seller's idea in regards to terms like closing date. 

Add us to the people who don't respond to verbal offers.  If it ain't in writing, it ain't an offer.

Scott - After I initially see a written offer, I don't mind doing some verbal counter-offers with written contracts to follow very closely on the heels of ... within 24 hours or less ... but as an initial offer, NEVER

I've handled verbal offers but usually when it's just to see if there is any hope of coming to an agreement on price.  I do, however, try to get the buyer to at least sign an Intent to Purchase with his main terms so that the Seller has something in writing to review.

Our market is so bad (2-3% of inventory selling every month), with our buyers understanding where the prices SHOULD be, and wondering how much further they'll fall in the near future (buyers are nervous), and our Sellers are still in the stratosphere with their unreasonable asking prices.  Oceanfront is such a peppered pricing landscape, that I don't even bother with making 30 low ball offers to unreasonable sellers, just to get one approved.  I just call the agents, tell them my of clients' wishes for a price, and wait to hear back from them.  That's the only way I can move fast through the sea of unreasonable sales prices.  It works!  I'm one of the few agents sellingoceanfront right now..  My clients are getting some real "steals" this way.  (lower than short-sales, foreclosures & REO's).  Case in point:  same week, Short sale went for $ 230K to regular agent, my client's price for the same product: $ 150K !!  Not too shabby!

Verbals are not a good thing. Too many problems can arise. Must be written. Who know if the buyer is even qualified.

I never consider a verbal offer. I always tell them to put it in writing.  It can get way too messy, otherwise.

Scott,

Respectfully, I do not sell real estate...but if I did, I wouldn't go against what I learned in Real Estate 101...All offers must be in writing!!! JMHO, Thanks,   Fran

Here's how I entertain them:  NO.  I tell them quite honestly about the story of a buyer who said he offered a different price than what I heard on the last (and final) verbal offer I ever took. I also need a written agency disclosure. Typically, not always, these buyers are not the most committed.

Why not create an online offer system on your blog. there they can fill out an offer / LOI and you and your Seller can see the terms. Make certain items that your Seller are firm on as required acknowledgments. Then once they have hit the submit button you have something to talk about.

We do it all the time, saves EVERYONE involved a bunch of time and hassle and once agreed a formal contract can be drafted per the agreed upon terms. Those who say that " an offer is not an offer unless it's on a certain kind of contract" need to get up to speed in a Web 2.0 world.

If a client can go to my website / blog, and likes what they see, and then wants to pursue an offer and I make it MORE difficult for them to buy..I would need to see a shrink..I would be crazy!! In today's world with so many expecting immediate response, the comet waiters can keep making people jump through hoops. I would rather strike when the iron is hot.

Maybe that's why our conversion rate is so high and while everyone else is begging for deals, we have to bring on more staff.

Darn,,why am I telling everyone this...nevermind..forget what I said..yeah..you're right..make your buyers send you written offers. Yeah please...!

I will entertain but knowing it is just that all talk. I would rather have in writing before I present to the seller.

There is so much more to an offer than the price and close date.  That is what a contract is for - to spell all the details so you know what you are negotiating.  

If someone wants to ask about $20,000 too low then after talking to the seller it is better not to waste time but if they want to sure we can go thru the paperwork.

There are no guarantees to an offer unless it is in writing so don't think you have a great deal until it is signed!

It doesn't sound like he wanted to be legally tied to the offer. I would guess he wasn't as serious as he was leading on. Or it could have been one of those weird situations, where they were fishing to see what they would take for someone else. 

I agree...a verbal offer can be told to an seller as a courtesy and as our fudiciary responsibility, but  as Ann Cummings, of Portsmouth NH Real Estate said, "no real action is taken", until it is  put in writing and even before that the customer needs to view the property because the offer may change or be revoked if the buyer sees they may have made a mistake with the initial offer.

Ever hear the old saying - A verbal offer is not worth the paper it is written on?  LOL

Milton:  In this day and age, with fax, email, etc, why verbal?? Also, when are your agency disclosures signed??  Also, what do you do if the buyer says their offer was HIGHER than what you DECIDED to present?? DONT DO IT !!!  Cmon, folks, this is a freaking home purchase, not a bike.

Depending on the situation, I am sometimes open to a verbal COUNTER offer, but I agree with you completely -- the initial offer must be in writing!

I have had several transactions over the past few years that went back and forth verbally until we came to an agreement and then wrote up a contract. It worked ou fine.

I don't mind starting with verbal offers in certain situations.  It actually saves a lot of time going back and forth. 

When I have a buyer interested in an over-priced listing I don't want to waste my time (or that of the "other" side) writing up an offer unless the seller will be reasonably negotiable.  We don't outline ALL terms in a verbal offer but you need to know if you're anywhere near an acceptable base to start real negotiations.

On the other hand, as a listing agent, I prefer not to waste my time (or that of my seller) presenting a stupid low-ball offer if the buyers aren't serious about paying a realistic price.  If they're just looking for a desperate seller, they might as spend their time somewhere else. 

I present ALL offers whether verbal or written understanding, of course, that we don't have a legal agreement until it's in writing and all terms are agreed to.  And, that being said, most (if not all) written contracts have so many "escapes" (with inspections, financing, feasibility studies, blah, blah, blah) they're rarely binding anyway if the buyer really wants out. 

It is fine to communicate a verbal offer. However, I think it is a universal law of real estate, that offers to be valid,binding and enforceable -- among other things -- MUST be in writing. No if's ands or buts! Who is to say you communicated the offer accurately etc. etc.

Some people just don't get it. I would not waste my sellers time with anything that is not initially in writing.

A verbal offer is a one-sided agreement.  Sorry (Brett) but why should my seller negotiate an offer that if "accepted" doesn't have any enforceable validity?  If I'm buying, it's great.  I can negotiate a deal... and walk away if I change my mind.  

Over in the Q&A area, there are loads of questions from people looking for ways out of the written contract.  If we skip the written contract, they are free to roam.  Of course, all of that is fine and dandy until you start factoring in the time off market or the possible loss from not getting another offer.  

As for convenience, I can get a contract filled out with you over the phone in just a couple of minutes.  I can fax it or email it to you.  You can fax it or email it back.  Ic ould probably find a way to do it on a web page... but then it is a written offer...  

so, would you take a verbal offer from someone unwilling to write one? 

If it is not in writing it does not really exist.... however that said, many of the lenders involved with short sales seem not to understand this, which makes things a bit of a challenge.

Who are we kidding Lane? Not sure how you write contracts, but my contracts when I buy are usually subject to inspection and a couple of other strong contingency clauses. In this market, as a buyer, we call the shots. I offer what I want, with the terms that I want and with the deposit that I want..all with a sole discretion clause to walk away. They either accept it or they don't..so all of this nonsense, and yes it is nonsense unless you are in Seattle or something, about there not being anything in place is nuts!

I did not say anything about a verbal offer. i said in my comment that an online offer / lOI is working for us.

As for taking a verbal offer, sure...plenty of times. No..seriously..plenty of times...some work out, some don't..definitely more up then down for sure. Especially when dealing with investors. Verbal offer are discussed openly all the time. We know what we want, no playing around and if the numbers work we do the deal. Real simple.

What's there to consider?  That's the problem with dealing with a verbal offer.  Price is only one component of an offer, obviously.  It's also a violation of Alaska statutes.  No written offer, no banana. 

Scott,

 I agree that verbal is more likely to fall apart than a written offer.  However lately I've run into Realtors representing foreclosures that once you submit an offer, want to do counters and modifications verbally so the bank only has to "assemble the board" once.  The last transactuion I did on a transaction for the buyers that is exactly what happened.  And to my happy surprise, the written counter came back exactly as agreed.  But to make things sweeter, we had verbally discussed the action that would be taken by the seller if the roof was called out on the inspection.  It was.  We asked for modifications and they performed as promised. 

Verbals aren't ideal but they can be useful if all the parities involved are honest and up front.

Goof luck and thanks for the information.

Al

www.talktotop.com

Not sure what value the fellow felt "acceptance" of his verbal offer held? Little silly. Imagine what a pain he would have been to deal with if he did make a written offer.

I have been getting a LOT of verbal offers from buyer agents in the past few weeks, and yes, two of them from buyers who have NOT seen the place.....always always asking for them to come see the place and then write out your offer......the first one came to see it and didn't like the floor plan the other one said they would out-wait the seller until the seller brought the price down...well, it will be a long time to come I'd say...

I do believe that all offers written or verbal need to be presents to the seller.  That said I would never have a seller accept a verbal offer.  After talking to the seller I tell the buyers agent to but it in writing and the seller will consider it. Remember folks: A verbal offer is not worth the paper it is not written on.

If an offer isn't is writing it's subject to modification, withdrawal or denial - none of which are any good.

Buyers can't buy unless sellers sell.  Simple fact.  And, this post is about verbal offers.

Unfortunately, verbal offers aren't worth the paper they're printed on. There';s no commitment.   If the seller verbally accepts the offer, the buyer will decide they want it cheaper yet.

I don't like to do verbal offer because for some reason or another words can get lost or misunderstood very easily.  That is why they say if its not in the written contract it isn't part of the deal.

I must admit.. my first listing i made the mistake.... buyer drives by... ooo I love this house..  she says.. hi just drove by your listing and I'm on my way over home to N.Y and I 'll be back next weekend and I have cash full price.. I won't milk it promise. Me wow first deal get both sides ... happy.. I call the seller he says ok no problem. To make it shorter buyer came back next weekend and she wanted to write an offer 10k less than what she first said.. The seller still accept it but I looked like an ass...

I must admit.. my first listing i made the mistake.... buyer drives by... ooo I love this house..  she says.. hi just drove by your listing and I'm on my way over home to N.Y and I 'll be back next weekend and I have cash full price.. I won't milk it promise. Me wow first deal get both sides ... happy.. I call the seller he says ok no problem. To make it shorter buyer came back next weekend and she wanted to write an offer 10k less than what she first said.. The seller still accept it but I looked like an ass...

I hold firm, as you do! I will call or email the seller and tell him about the conversation, but don't recommend they agree to anything until it's in writing... or for real! It's all too easy for the buyer to back out before signing... and all too easy to just throw out an offer and see if the seller will bite. Too dangerous for the seller! I don't even like these 1 pagers you get from investors that state his terms and "if we agree" then a real A/S will follow in x number of days. Do it right!