When it comes to real estate contracts, time is of the
essence. In many cases, placing time constraints on your
offer can often work to your advantage.
If you've ever seen a telethon fund-raiser, you would notice
that over 90 percent of the donations are generated in the
last half-hour. Even if the telethon has been running for
weeks, it doesn't matter. In the last few moments, just
before the telethon goes off the air, the money starts rolling
in.
In many sports, the game is often decided within the last
few minutes. Take for example the two-minute drills in basketball
or the two-minute warnings in football. How often does the
game rest on the final basket or field goal?
The same rules apply in getting sellers to accept your
offer. If you don't set a deadline for acceptance, the sellers
may simply procrastinate to the point the deal falls through;
even if it's an offer they might otherwise have taken!
Often, buyers underestimate the importance of limiting
the seller’s time to accept. This is unfortunate since
it is a critical element in formulating the deal. Remember
that by allowing for a lengthy deadline, you (the buyer)
are committing yourself while the seller takes their time
to either accept or reject your offer. By setting a strict
deadline, you are forcing the sellers to accept, reject,
or counter your offer. By placing the ball in their court,
you are demanding they take action or risk losing a potential
buyer.
How Much Time Should You Give the Sellers?
Now that you understand the importance of setting a deadline,
the question remains: How much time should you give the
sellers?
Since decisions typically require the coordination of several
individuals -- one may be working, out shopping, or otherwise
unavailable. Naturally, it may be difficult to have your
offer considered within a short hour or two. In most cases,
allowing for twenty-four hours or until midnight of the
same day is reasonable.
Sometimes, it may be hard to get the sellers together all
at once. They may be on vacation, have dinner plans, or
be off on a business trip. Whatever the reason, I recommend
offering no longer than 24 hours. If they need more than
24 hours, wait! In today's age of cell phones, fax machines,
and next day delivery, there is no excuse for taking longer
than a day to decide. If the seller is serious, they will
make themselves available to consider your offer.
Don't be Pressured by Agents Insisting
on More Time
Some agents may hesitate to place pressure on sellers.
Many are unsure of their negotiating skills. Others may
be unwilling to present an offer that has a potential of
being rejected.
Some agents may suggest that it's impolite to demand such
a short deadline. Others may say, "Since your offer
is weak, you should give the sellers more time to think
about it." This is very bad advice. Whatever the reason,
don't back down on forcing a strict deadline.
Buying a house is serious business. Sellers should not
be offended by any offer you present. Instead, they should
be quite thankful to receive it. Remember that the sellers'
only motivation for letting your offer sit is that they
are hoping for a better deal to come along. It is very possible
this will happen. By setting a strict deadline, you minimize
the possibility of opposing bids.
THE DEADLINE APPLIES THE PRESSURE
TO HELP ATTAIN THE DEAL YOU WANT.
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