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The Errors and Omissions in a Purchase Offer
Errors and omissions in a purchase offer could be enough to cause offer rejection.
Some people strongly believe it is the Sacramento listing agent’s duty to point out errors and omissions in a purchase offer to the buyer’s agent. This Sacramento listing agent is not one of those. Much as I might feel the urge to help my fellow real estate agents, there are good reasons not to. For starters, a) some agents resent the advice and tips; b) it’s not good risk management practice; c) being “fair” to all parties could be interpreted to mean I should provide input to every single real estate agent; d) my fiduciary is to the seller, not a random stranger; e) I am not their broker; and f) we may not agree.
Not to mention, offering help could backfire. A disgruntled home buyer whose stupendously brilliant offer was rejected by the short-sighted seller — the seller who obviously could NOT spot a good offer if it hit her in the eye, with all of its errors and omissions in a purchase offer explained in detail by the listing agent to the buyer’s agent — could very well decide to pursue litigation. Even though the offer was lousy and it sucked. No thank you. Bad risk management to engage in that sort of liability. A buyer’s agent might even beg to know why the offer was rejected; not gonna breathe a word.
I see stuff all of the time that blows my mind. I wonder how could the agent write an offer like this? My compassionate nature and inclination is I should help that agent, but fortunately my good common sense takes over and speaks more loudly. The errors and omissions in a purchase offer might be small things like bucking local customary buyer-paid fees or asking for a detail that is expressly spelled out in MLS as an exception. It could be larger things like messing up the sales price or blatant misinterpretations of the California Residential Purchase Agreement or checking boxes that don’t apply.
Not my place to point out the errors and omissions in a purchase offer. But it is good fuel to use for my own Elizabeth Weintraub Team members, to show them what not to do and to help them to improve their own purchase offers. It’s probably one of the reasons we enjoy such a high success rate for offer acceptance. It’s painful for me to see preapproval letters for buyers dated from 2015 and to know the reason these poor unsuspecting buyers are not in escrow this spring is printed on page 10 of the RPA.
But . . . not my job. My job is to fully inform my sellers, to expect my sellers to make their own decisions, and to treat private information as confidential.
Red Flags on Purchase Offers for Sacramento Homes
Every Sacramento listing agent owes a fiduciary to her sellers to try to ensure that the offer the seller has received is a bonafide offer, especially those that seem a little bit weird. I’m not about to say that all out-of-area buyers, especially those from the Bay area, are crooks or are not to be trusted, but I have seen my fair share of purchase offers that require additional scrutiny and most of them seem to stem from the Bay area. To be fair, though, there are crooks right here in Sacramento, and there are doofus real estate agents right here in town who enable them.
Part of my job to my sellers is to look for what can go wrong and advise accordingly. The first red flag I might see in an offer is due to the fact the agent might not read the MLS listing nor adhere to the requirements. I suspect they do not always read all of the instructions because they either don’t have full access to MLS, they are confused, inexperienced, or they just didn’t bother to look for attachments. Some agents probably do not want to comply, so they simply ignore the requirements.
The second red flag is the offer itself might appear as a template. This means all of the standard information is typed in a different font, often an odd color, and a different point size, and the pertinent data such as property address and sales price do not match. Agents use this procedure when they are creating multiple offers and throwing those offers to the wind. They think nobody notices this.
The third red flag is the offer might be missing information. Certain boxes might be left unchecked and blank lines will be incomplete. Attention to detail is not always a strong suit among thieves, perhaps the APN number is missing or the agent’s license number is not there, which are important items to include.
The supporting documents are often a mishmash of papers tossed together. The proof of funds might not contain the buyer’s name. The earnest money deposit might be from a new stack of checks, numbered in the low 100s and containing no date nor identifying information. The pre-approval letter is most likely outdated if not expired.
You might ask yourself why do they bother to do this? What is the point? The point is the investors think they are clever and smart to lock down as many properties as they possibly can while they figure out which ones they might want to buy. They might make offers on 10 or 20 listings but be able to buy only one. This practice is not advised and many lawyers say it is against the law, but when has that stopped the crooks?
When you look at all of this damaging evidence, coupled with the fact the agent has not shown the home to the buyer, these are not really offers. If you need further proof, just ask the agent a question such as did you show the home? The agent won’t reply. And there you go.
