O.K. Let's try this one more time.... - Posted by Johnnie

Posted by Michelle on February 03, 2002 at 23:03:50:

I am looking to see if I have a responce from JP VAUGHAN anyone have info? Thanks

O.K. Let’s try this one more time… - Posted by Johnnie

Posted by Johnnie on January 24, 2002 at 06:28:01:

Would anyone be willing to post a sample, written offer? Just so that I can see how you would word it. Do you just say:

I _______, do hereby make the offer of $________, on property located at 1243 abc st. anywhere, usa xxxxx. This offer is good for thirty days from today and is subject to approval by my partner.

Or do you make a totally different offer for each property?

Any help will be greatly appreciated.

Thanks,
Johnnie

Re: O.K. Let’s try this one more time… - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on January 24, 2002 at 21:10:03:

Johnnie------------

You don’t mention the approach that you are taking. Different approach should command different offering approaches, in my opinion. If you are broadcast “low-ball” offers to the local real estate brokerage community, you probably had better use their “standard” contract.

If you are getting motivated people to call you, you might well do all, or virtually all, the negotiating on the telephone first. Then either write up an individualized sales contract that you take to them, mail or fax to them. Or else meet with them to fill out a contract.

And, perhaps use a very short contract. The long contracts have a lot of clauses that are there in case they are needed. Not every deal will need them, but some will, so there they are. If those clauses are not appropriate for your deal, just don’t include them. Also, there is something like a page of stuff related to the commission of the real estate brokerage. Plus disclosures of agency relationships. If there is no real estate broker or agent involved, all that verbage is superfulous and can be safely ommitted.

I like to use a very short contract, one page long. It is simply worded, short, easy to understand. I don’t really feel the need for an extremely tight contract. If the seller wants to back out, I probably am going to let him/her do so with no plan to sue them, enforce the contract etc. I am probably getting an extremely attractive deal. But, if the seller is changing their minds, I am very unlikely to argue with them. I will just go out and look for some other very good deal.

A story. A couple of years ago I sent a one-page purchase contract to a seller. Then he told me he wanted a longer contract–“to be sure everything is legal.” I sent him a CA association of realtors contract–8-pages long, I think. He was not happy with that, either. He felt that there were a couple of the terms which were a little different than we had agreed to on the phone. Finally, I put over half the purchase price into the escrow and told the escrow agent to get the information about my 1031 exchange funds from the accomodator. Those funds would complete the purchase. When she had evidence that the full purchase price was available for the escrow, she talked to the seller, sent him escrow instructions, and, when he signed and sent them back, with a notarized deeed, she closed the purchase. And he had never signed a purchase agreement at any time! Strange duck. But, I guess when people give you $50K in free equity, they have the right to be eccentric.

Some people will tell you that a real estate purchase agreement has to be in writing. NOT TRUE! It only has to be in writing if you want to try to enforce it in a court of law. I have many times bought properties from people without a contract. I make up a deed from them to me. I get a cashier’s check for the money they should get and we meet. They sign the deed in front of a notary. I hand them the money and go record the deed. Now, I will have already done my title search and looked at the property and so on before doing this. But there is no need for a contract to buy real estate. Now, if you have problems later, you may not be able to try to sue the seller. Now, I am almost never paying full market value when I buy, so I don’tn worry too much about things wrong with the house.

Good Investing**Ron Starr

Re: O.K. Let’s try this one more time… - Posted by GL(ON)

Posted by GL(ON) on January 24, 2002 at 09:03:19:

Every state has different laws, and every region has different offer blanks put out by the local real estate board.

Ask a friendly RE agent for a copy of the form used in your area. It will be legal and it will be familiar to sellers, RE agents, banks, title co.'s and lawyers. If you make up your own it may or may not be legal but it will arouse suspicion just because it is different. So it is best to use the regular form, but modify it with conditions to suit your needs.

Re: O.K. Let’s try this one more time… - Posted by Rich[FL]

Posted by Rich[FL] on January 24, 2002 at 08:17:39:

Jonnie, to me that looks more like a letter of intent to purchase. A “true” offer, in my mind, would be a complete written contract to include the purchase price, terms, closing instructions, etc., signed by you (if you’re the offerer). Each offer, or letter of intent, should stand on its own and be written to conform to the specifics of each property or situation; so yes, each one should be different.

I have done one of these letter of intents just recently on a pre-foreclosure property I’m working on. It’s not a contract, but if agreement can be made on the basic ideas, then a full contract can be drawn up for signature.

I’m sure others will chime in here with more detail. Hope this helps.

Rich[FL]

Re: O.K. Let’s try this one more time… - Posted by Johnnie

Posted by Johnnie on January 31, 2002 at 18:59:13:

Ron,

Your post was very imformative and useful, as always, and I thank you for it.

I have a couple of questions to ask, if you don’t mind.

  1. “If you are broadcast “low-ball” offers to the local real estate brokerage community, you probably had better use their “standard” contract”.
    I have a ‘Residential Sale and Purchase Contract’, which is the standard form for Florida Association of Realtors, but it states at the bottom in small type “The copyright laws of the United States (17 U.S. Code) forbid the unauthorized reproduction of blank forms by any means including facsimile or computerized forms.” Up above this statement it states “This form is available for use by the entire real estate industry and is not intended to identify the user as a REALTOR.” This makes it sound like I can use it. What’s the deal?

  2. “I put over half the purchase price into the escrow and told the escrow agent to get the information about my 1031 exchange funds from the accomodator.” What is an accomodator? I could not find the definition in any of my glossaries of definitions of real estate terms. Also do you purchase all of your deals cash? Or is that any of my biz?

Thank You,
Johnnie

Re: O.K. Let’s try this one more time… - Posted by GL(ON)

Posted by GL(ON) on January 24, 2002 at 09:50:02:

Here is a site with legal forms, including offer forms.

Re: O.K. Let’s try this one more time… - Posted by diana

Posted by diana on January 24, 2002 at 12:40:23:

This confuses me too. I purchased my first rental property on a “offer to purchase” form. Never signed a purchase agreement. When the mortgager asked for one I just gave them the “offer” they accepted that as a purchase agreement. So whats the diff?
Diana

Re: O.K. Let’s try this one more time… - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on February 01, 2002 at 14:44:37:

Johnnie–(FL)------------

  1. I suppose that they want to protect their copywrite. I suspect that you could use copies of the form and there would be no reprecussions if you make your offers through real estate agents and brokers. But, please remember, I am not an attorney. So this is not legal advice, it is just my hunch. Now, you may well be able to buy the forms in packets of 20,25 or 50, or something like that. If they are no carbon required forms that make multiple copies when you write on them, you might want to buy them by the batch.

  2. Accomodator is another name for the 1031 intermediary. The company or person that holds the funds after the sale and before the purchase of the new property.

Well, how one buys is an individual thing. In that case, I had quite a bit of money toward the purchase price sitting in my 1031 account. I had a line of credit for the rest. Later I refinanced most of the money back out. I was having trouble getting the seller to sign a contract to sell, so I decided to simply put the full purchase price – $110K – into the escrow and see if he would bite. He did so. Since I buy properties mainly on tax sales these days, yes, I pay all cash.

Maybe I should write a book: 100% cash down–How to buy properties with all cash purchasing. It might be a slim volume, because when you use all cash there usually isn’t a lot of tricky stuff to do. Go down to the bank, get the money, go buy.

Good Investing****Ron Starr