Assembling Your Buyer's Briefcase
|Let's start with the basics. The concept of a "Buyer's Briefcase" is to have the right forms necessary to "sign up" a transaction at your fingertips at all times. It's kinda like a salesman with his order pad. When someone wants to give you the order...you need to be ready to sign them up! |
So...the very first form you need to include in your Buyer's Briefcase is your Contract For The Purchase Of Real Estate. You'll use more of these forms than any other. How many you have on hand is directly related to how aggressive you are in your market. I print mine up 10 at a time on my personal computer. It's rare for me to make 10 offers to purchase on any given day. In fact, it's rare for me to make 10 offers to purchase in a week's time anymore.
Don't get me wrong, I still like to write offers, particularly when I want to test a seller's motivation. But...that's a different topic! The whole idea behind the Buyer's Briefcase is to have the necessary paperwork at hand to commit a transaction to writing. Remember, for a real estate contract to be enforceable, it must be in writing.
When you've reached an agreement with the seller, you want to reduce that agreement to writing right then and there. That's what your stash of Contracts For Purchase are really for...converting unenforceable verbal agreements into enforceable written agreements. seller's expect it of you! That's what being a professional is all about. Realize that if you don't write up the order, you're leaving yourself vulnerable to the competition. You can't afford to leave a motivated seller unattended. Sew up the deal. Be prepared to harvest your crop.
Learn all you can about Contracts To Purchase. Overcome any fear you might have of making written offers and writing contracts. Then come armed with your limited edition pre-printed customized contracts when you meet with Sellers. A signed contract has value. A signed contract gives you rights. In this business, a signed contract is the same as legally printing money. Nuff Said!
Protect Yourself with An Addendum
If you work with Realtors (and I think you should) sooner or later you'll be put in an uncomfortable position. Here's what I mean...
I work real hard to get Realtors to call me when they run across a Seller who really needs to sell. And when they do, I drop whatever else I'm doing and give them my undivided attention. After all, I want them calling me with deals. In my opinion, they will continue to call me as long as I respond appropriately.
Anyway...back to the uncomfortable position part. Realtors are trained to write up the order. If there is a deal brewing, they will get it reduced to writing...guaranteed! Unlike a lot of would-be investors, Realtors understand that they must go through the contract process in order to reach their real objective, which is pay day. Realtors press hard to get contracts signed!
As a result, sooner or later you will find yourself sitting down at a table with a Realtor...with a pre- printed Standard Contract slid under your nose for your approval. I can't explain why, but at that moment in time, the pressure is on you! This is not a good time to depend on your memory. You're probably more interested in making a good impression on the Realtor, but you shouldn't lose sight of your goal, which should be to tie up a profitable transaction under some set of price and terms...while limiting your liability in the process.
You simply can't accomplish your goal without altering the Standard Contract!
Turn Any Contract Into a Buyer's Contract
While it should be your goal to write your offers on your own custom contracts, sometimes this just isn't possible or practical. Particularly, if this is the first transaction you are attempting with a given Realtor.
The simple and easy solution is to have your own Addendum ready to attach to any Standard Contract. Your Addendum should alter any language in the Standard Contract not to your liking... such as Specific Performance provisions. In other words, the Addendum can and should turn any Contract into a Buyer's Contract. Just attach your Addendum to the Standard Contract and include the language "See Attached Addendum" on the face of the Standard Contract and you're in business. Your addendum should be signed and dated, and it's a good idea to reference the original contract.
So...the next time you're under pressure to sign a Standard Contract that you know includes language not in your best interest, simply whip out your Addendum and attach it to the contract, thus making it a Buyer's Contract in one fell swoop. Then you can concentrate on schmoozing with the Realtor and seller...building your relationships for future transactions...like you're suppose to do!
|Scott Britton, author and publisher of the “University of Real Estate Letter” is an active, full time Investor who has been successfully buying, selling and investing in Single Family Houses and Mortgages since 1979. Beginners and seasoned pros alike have profited from his down to earth, common sense investment advice. Scott is known for his clear thinking and problem solving abilities. His strategies for generating cash while building wealth, can help anyone accelerate their investment program while improving their lifestyle. Scott, along with his wife Cindy and their three children, live and work out of their high-tech, low-cost home office in historic Jackson, Mississippi, where he practices what he preaches on a daily basis. |
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