Hi, I'm new here and I'm getting set up to send out my first mailing for buying land. I bought Seth's offer letter / purchase agreement template and I have a couple of questions...
Do I need to somehow collect the seller's phone number or email on the purchase agreement? It seems like it would be necessary to have in order to set up the closing. Is the thought that I'll likely have contact with them before they actually sign the agreement, so it's not necessary to capture it in writing on the purchase agreement?
Also, in the purchase agreement it says that I'll pay all of the fees associated with closing. Does a title that has issues end up costing a lot more to close? I'm concerned that this is kind of open ended and that I could end up paying a lot more for a complex title closing than I'm expecting (which I'm estimating is about $2K).
Welcome to the forum and congrats on getting started, @bdub!
I haven't personally gone the Blind Offer route at this point (having done all neutral white letters or yellow letters so far), so hopefully others with more specific experience with this one will respond after me, but I would say that my general understanding is that the blind offer you mail out is really more of a letter of intent, and unless you sign it, as well, it's not actually an enforceable agreement/contract. So hypothetically, a prospective seller would receive your blind offer, sign it and return it to you, but you'd then have an opportunity to research the property in greater detail and have a conversation with them to ask about several things, such as how they acquired the property (might tip you off to potential title issues that could come up; for instance, a lot of inherited properties might not have all the paperwork fully recorded), whether there is anyone else currently on title, etc. Also, even after you've signed an agreement, as long as you've included some statement to the effect of, "Buyer may cancel this agreement at any time and for any reason," then you could still back out or renegotiate in the event that something surprises you during your due diligence and closing process.
Bottom line, in theory, and in any legal sense, you don't need to feel married to the price and terms that you listed in your blind offer...That said, I know I've had a bit of a hangup, myself, on the notion of renegotiating a written offer after I sent it out, unless it's because something I truly couldn't have reasonably anticipated has come up, so if you're concerned about that, I do get it.
Thanks, David...this is helpful. Sounds like I should be able to get more information on closing costs before I sign the agreement and send it off to the title company.
@bdub, that's right. And once you have someone respond indicating that they would like to sell you their property, if you're planning to close using a title company, I would call around to multiple local ones and ask them what your closing costs would be. If those costs are higher than you were anticipating when you priced your blind offer, if you want you could tell the prospective seller that, and try adjusting your offer to them accordingly. Depending on the dollar amounts involved, they may or may not agree, but you can try.
If you're sending out blind offers, then yes, you'll want to collect the seller's phone number and/or email address (preferably both) when they sign and return the agreement to you. That's why you'll find these blank spaces at the bottom of those blind offer templates.
If you're using the basic purchase agreement (which looks a little different than the blind offer templates), there's a different process with these. With this approach, you would be using these templates after you've already had a conversation with the seller, so you will already presumably know their phone number, email address, and some basics about the property in question. I use these versions when I'm sending out postcards or "neutral letters", where the seller calls me, we talk for a few minutes and I do a bit of research and THEN I send them the purchase agreement (so these fields for their email and phone number aren't needed at that point).
If you meant to get the blind offer templates instead, feel free to email us at [email protected] and we can set you up with the right thing.
it sounds like you might have purchased the basic Offer Cover Letter and Purchase Agreement, not the Blind Offer templates.
Thanks for responding. You're correct, I purchased the basic offer cover letter & purchase agreement. With your response, I think I'm good to use that one and add a spot for the seller email and phone number.
@dl7573 Hi David. I just sent out a batch of blind offers with my pasted JPEG signature on them. As you noted, there is language in the offers saying I can cancel at any time for any reason, so I’m not too worried about the binding nature of the purchase agreement. However, based Seth’s blind offer template, it looked to me as though that field should have been filled in prior to the mailing. Was I mistaken? It seemed like the blind offers would be worthless without my signatures already on them. @retipsterseth did I blunder? Separately, let’s say an offer is accepted and signed by a prospective seller, and after some due diligence I decide to modify the offer. Possibly offer a lower price. How do I go about doing that? I’m only just getting started in this business and appreciate the group’s patience with my naive questions. Thanks.
@jamesrpett those offer templates are worded as a letter of intent, which essentially states what price you wish to buy it at. Because of all the out clauses in there, it would be hard for them to hold you to anything.