By: Matt Busch

Clever conditions and strategies 

Tags: conditions to consider using in your offer

First thing is first. If the listing does not state that there are "no pre-emptive offers" then you can start to think about placing a pre-emptive/ bully offer. This allows you to avoid the idea of being in competition, however, you will need to make it worth the sellers while to seriously consider your offer. 
 

This article has spawned from our most recent blog post - How to strategically win a multiple offer .  Make sure to read this article as well in conjunction with the following as they are closely related. 

With every home and offer situation, there are special circumstances that will or will not permit some of these ideas and strategies. We're putting them here to say that there are alternative ways to get deals done. Some of these ideas and conditions have major advantages and major weaknesses. Use strategically and thoughtfully. 

For Buyers 

 

When in multiple offers consider using one of the following clauses

 

This offer is being submitted on the basis that it is part of multiple offers. If the Seller receives no other offers by ________AM/PM on (Date:____________________)., the Sellers will notify the Buyer and the Buyer shall have 2 hours to revoke or revise their Offer. If the Seller accepts the Buyer's Offer the Seller shall provide the name and phone number and Brokerage Company that submitted the competing Offers.

 

OR 

 

In the event that another offer is submitted on the subject, this offer is deemed to have been withdrawn and revoked by the buyer. The listing agent shall inform the other competing agents/ brokerages that this offer has been withdrawn. 

 

OR

 

INCREASE option……………………

“The buyer agrees to pay $2,000 more than the highest offer received, except for an offer that is their own. Not to exceed a total of $(upper limit). After acceptance, The sellers agent agrees to show the first page of the highest offer received.”

 

 

 

When placing your offer, in a multiple offer Ask the agent 

 

"Since we were not aware of your procedures for your, and your sellers multiple offer night. I.e. best shot/ one opportunity, or a few rounds, we have placed an offer that we feel is fair. It might not be exactly what you are looking for yet, but I intend to help you get their

 

If your seller likes our offer then accept, or it's intriguing but not quite there in terms of competitiveness then please counter us, you can do it in such a way that allows you to still deal with any offer by signing it back now and make the irrevocable 30 minutes from when you're sending it back to us. You do not have to let any of the other offers know that you’ve done this. If we were to reject the counter (which I will work hard to get accepted) then you can go with the alternative offer(s)."

 

Adding some advantages to the seller that will not cost you a lot

 

In addition to the agreed-upon date that your agent has already discussed with the listing agent, maybe you want to provide the seller with even more flexibility on the closing date? Consider the following: 

 

Notwithstanding the completion date set out in this Offer, the Seller may ____________ the completion date of the transaction by not more than _____ days, by giving written notice of the amended completion date to the Buyer or the Buyer’s Solicitor at least _____ days in advance of the earlier of the completion date set out herein and the amended completion date.

 

Removing the Finance and Home Inspection condition

 

When heading into multiple offer night make sure to know from your bank that you would 100% be offered the mortgage based on your finances. I like to point out to my clients that in order to have someone you can rely on for calls after 4pm that they not only work with their bank but also with a broker who is available after banking hours. 

 

Maybe you are confident in the finance and considering removing the condition but you are putting 5% or 20% down, and you only want to ensure that you meet the banks thresholds on the % down by having them agree to the purchase price. You only need to have them appraise it rather than go through the entire process of the finance condition. This is the condition to use:

 

This offer is conditional upon the buyers mortgagor's appraisal of the subject property corresponding to an amount that is equal to, or greater than the agreed purchase price, this is included for the buyer’s sole and absolute discretion to be waived in 5 (five) business days (excluding Saturdays, Sundays and Statutory Holidays) after acceptance, that this condition is fulfilled, this Offer shall be null and void and the deposit shall be returned to the Buyer in full without deduction. This condition is included for the benefit of the Buyer and may be waived at the Buyer's sole option by notice in writing to the Seller as aforesaid within the time period stated herein.

 

You can also read more % down and the appraisal of the property here:

http://www.buschteam.ca/b/blog/recent-posts/what-if-the-bank-does-not-appraise-your-home-for-what-you-paid.html

 

Its very likely you would also want the peace of mind of a home inspection condition. In a multiple offer less is more, when it comes to conditions. When the seller is looking at an offer with a home inspection vs. an offer without one (that is even $5000-10,000 less) I can promise you 9/10 the seller will take the one without the condition. SOOOO the question becomes how do you remove this condition with confidence. There are 3 options. 

 

1. You could just remove it. (not recommended) 

 

2. You could do a pre-home inspection (sellers, we recommend you do this when we list your property) 

This is a home inspection done before your offer goes in. The only risk is that you pay $400-$500 dollars for a

Furthermore what we recommend is that you do the inspection, most inspectors have a "walk through" alternative where they only charge $200-300. If you end up winning the property with your bid then ask the inspector to generate the report and pay the difference. 

 

3. You could do a detailed walkthrough with someone knowledgable, and put a list of questions together, or ask some of these questions. http://www.buschteam.ca/b/blog/recent-posts/questions-your-realtor-should-be-asking-before-placing-an-offer.html

For Sellers 

 

A buyers offer usually has all of the standard terminology found in the pre-printed terms and condition, the buyer's agent will insert his own clauses in schedule A based on the buyer's requirements and his/her experience. You as the seller review their offer with your agent and usually accepted or change some of the terms. Im here to tell you to think strategically and insert the clauses as found below that you find necessary. 

 

You should insist on this clause being inserted into your sale. To summarize it I want you to just think of a situation: You are 2 days away from moving and the deal being completed. The buyer and their agent want to come to see your home the day before you close, so you get a call from your agent with this request and you are obligated to do it. You have 738247857872 things going on in preparation for the big day coming up, now you're worried about them having to step over boxes and the home being in decent shape for them. This clause alleviates all the pains.

 

Notwithstanding the purchasers requests for revisits in schedule A, the Seller shall be obligated to 1 (one) revisit. The Buyer and Seller hereby agree any visits for the Buyer are to be accompanied by their agent, and shall be limited to one hour or less unless otherwise agreed upon. The revisit request must be made with minimum 24 hours notice, this access visit shall be at least 3 (three) days prior to closing. The seller is to leave the home during this period. 

 

You may also want to consider this one: 

If the accepted offer is conditional the Seller may continue to offer the property for sale and, in the event the Seller receives another Offer satisfactory to the Seller, the Seller may so notify the Buyer personally or in accordance with any other provisions for the delivery of notice in this Agreement of Purchase and Sale or any Schedule thereto. The Buyer shall have 48 hours from the giving of such notice to waive any and all conditions by notice in writing delivered to the Seller personally or in accordance with any other provisions for the delivery of notice in this Agreement of Purchase and Sale or any Schedule thereto, failing which this Offer shall be null and void and the deposit shall be returned to the Buyer in full without deduction.

 

I like it because it gives you some flexibility once you make a conditional deal. Let's say that buyer 1 found something that they were less than impressed about with your home, it could be anything at all. Unbeknownst to buyer 1 you had some major interest come in from buyer 2 and they place an offer. You now have the option if buyer 1 wanted to amend anything with the existing deal to entertain buyer #2’s offer.

 

The reason you might not like it as a seller is that you might get another offer from buyer number 2, on day 3 of buyer number one’s conditional period that is $10,000 more than buyer number 1 offer which is what you agreed to. You now know that you could have sold your home for that much more, and your first buyer wants to firm up, without amending the deal at all, so you never got the opportunity to entertain that second offer. 

 

For more tips and tricks to buying a home or getting your home sold for top dollar, talk to us today. Or simply get in touch to receive regular tips and tricks from our newsletter sent out monthly.

You might have a few more questions about interviewing and knowing your buyer. Read here:

http://www.buschteam.ca/b/blog/sellers/questions-for-your-buyer.html

 

 

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