fbpx

Verbal Offers v Written Offers

Real estate tip verbal and written offers

Quite often, we are asked by a potential Buyer whether the owners will consider a verbal offer. Many owners prefer to avoid such offers, and in fact, we confirm with all our clients prior to listing, of their instructions to only deal with written offers –being those offers via the fully and correctly completed offer documents. (the difference between an offer and a contract here)

Insisting on written offers isn’t just to benefit the Sellers. It is very much a benefit to the Buyers too.

So why would a Buyer want to only offer verbally in the first place?

This could be for a myriad of reasons. The Buyer may be looking at several homes and doesn’t want to ‘commit’ a written offer to one only, so they are in fact playing the field to see which homes comes out cheapest. The Buyer may be lazy and simply can’t be bothered sitting down with the Agent to complete such.

Or people wanting to negotiate verbally to uncover the owner’s final position only to pass that information onto the true Buyer, who then offers under that again. Or it can simply be the Buyers have no idea of the offering process, and so it is due to ignorance rather than gameplay.

The issues with verbal offers are that they have no terms and conditions and are not binding. And it is this reason that verbal offers are of no benefit to either Buyers or Sellers.

At some point, the verbal offer must be formalised in a fully completed offer document with all the details of the parties as well as terms and conditions. What happens if one of the parties now renege and try to re-negotiate?

Verbal Offers Vs Written Offers

For example, a Seller may be under the impression the price agreed was with no conditions such as a building and pest clause. The Buyer wants that clause as a protection. So now the Seller insists on a higher price to include such conditions.

Or consider another scenario where a Buyer replies to a Seller saying they need a 60 day finance clause. The Seller would not have expected that and would not have agreed to such, but again these details were not discussed. These scenarios illustrate why verbal offers are fraught with danger.

Buyers need to consider another point.

A seller will always take a Buyer’s offer more seriously if they have completed the appropriate offer documents.

Imagine being a seller, with the Agent sitting across the table, laying out the formal offer, signed and fully completed with the price and all the other details such as deposit, terms and conditions, etc. Now imagine the Agent ringing a Seller saying, ‘Hey John, I have a guy here wanting to offer $XXX, what do you want to do?”. Which do you think would hold more value to the Seller and which offer do you think the Seller will more likely negotiate seriously?

As a Buyer, you must remember the Sellers do have fears and trepidations just like Buyers. The more comfortable you can make the Seller, the better they will view your offer in negotiations and may even have leniency – that is why written offers are a must. If you make a verbal offer the Seller will always ask why – are they not serious. Verbal offers are far too easy to dismiss.

So, it is clear to see why it is in both the Seller’s and Buyer’s benefit to take the time and complete the appropriate formal offer documents.   

For more tips head to The Seller Page or the Buyer Page

Written by Shawn Kristofer

Other Resources for Buyers

Brisbane’s Housing Market Continues to Soar in 2024

Brisbane’s Housing Market Continues to Soar in 2024

Brisbane's housing market has shown impressive growth in the first quarter of 2024, according to the latest PropTrack Home Price Index report. Home prices in Brisbane have risen at a fast pace, now standing 12.90% above March 2023 levels. This robust growth has been...

read more

Which One? – Buying a home

Navigating the Home-Buying Maze: Units, Townhouses, and Houses Explained When venturing into homeownership, many find themselves at a crossroads, wondering whether a unit, townhouse, or standalone house best suits their needs. This decision is crucial and warrants a...

read more
ALL Buyers Should Know these 3 FREE Websites

ALL Buyers Should Know these 3 FREE Websites

https://youtu.be/DcA2Vsn6F8k Have you heard the saying “being informed is being forewarned’? Quite simply, it means if you have the correct information on hand before you make a decision, it can save a lot of heartache should something come up unexpected. No one likes...

read more
Formal Offer Vs Letter of Offer

Formal Offer Vs Letter of Offer

The best way to make an offer is to ask the Real Estate Agent for a copy of the Contract of Sale and make a formal offer. Why? Because once your offer is formalised, the real estate agent is legally bound to present it to the seller. Now, isn’t that a...

read more
Buying and Selling in a Hot Market

Buying and Selling in a Hot Market

If you’ve been searching for a property for a while, you would be well aware of the increasing property prices – excellent news for all property owners. There has been 2% growth in Brisbane house prices in August alone and 18.3% in the past 12 months^. While current...

read more
What are you looking for?

What are you looking for?

We appreciate quite a number of people come through open homes to see what’s out there, to get a handle on the market. That’s fair enough and we do encourage people to do their research. But we often surprised when we speak to people, many simply have no idea of what...

read more

Pricing Apps & Websites

https://youtu.be/oMmN3w8zAGs You may have seen the adverts where a buyer is speaking with an Agent who says one thing, but then buyer smirks as they pull out their phone with a pricing app showing the ‘real’ price, in which they’re depicted to either have dodged a...

read more
Real Estate – Quick Bites

Real Estate – Quick Bites

Ever gone to a specialist in an industry and they use terms you really don’t understand? Or use acronyms like it is everyday day talk but leaves you scratching your head. “Hey mate, your overhead cam driver separator on the GNC has had it! Gonna need to order a new...

read more
Building and Pest – Pass or Fail

Building and Pest – Pass or Fail

When purchasing a home in Queensland, the standard Law Society Contract for House and Residential Land hold several consumer protections. One, in particular, is the Building and Pest clause. This basically allows the Buyer to place an offer on a home and secure a...

read more
Open Home Etiquette

Open Home Etiquette

Open homes are pretty much a staple of real estate. They allow a large number of people to see the home, making it less intrusive on the owners (imagine conducting 25 private inspections through the week!). They also allow the buyers to self-qualify and come through...

read more