How To Manage Real Estate Offers

The offer stage in the real estate transaction process is vital. If you’re a real estate agent or broker assisting buyers to secure their dream property, this stage is where your expertise and strategic thinking are most needed.

Managing a real estate offer is also crucial for ensuring a smooth transaction and keeping your clients happy, as this could lead to more business in the future.

Whether you’re dealing with multiple offers, counteroffers, or buyer contingencies, navigating the offer process can be challenging.

In this article, we’ll guide you through the offer process step by step so that you can successfully close every deal on time, every time.

What Is a Real Estate Offer?

A real estate offer, also known as a purchase offer, is the first formal communication between a buyer and seller that can ultimately lead to the final deal between these two parties. 

An offer will contain: 

• The amount the buyer is willing to pay.
• Any specific terms of the buyer.
• The proposed closing date.
• How additional costs will be covered.
• Contingencies.
• The amount of earnest money deposit accompanying the offer.

After the offer is created and signed, it will usually be presented to the seller by the buyer’s agent, the seller’s agent, or the two together.

If you are a real estate agent managing multiple offers at any given time, it’s important to have a process in place to stay organized, productive, and efficient. 

Let’s take a look at making an offer from the buyer’s point of view. New real estate agents must understand this process if they are to act as buyer agents. 

7 Steps to Making an Offer on a House 

You’ve helped your clients find their dream home. Now, it’s time to make sure they get it. Here’s an overview of the offer stage of the home-buying process:

1. Choose how much to offer

Step one is to decide how much your clients are willing to pay for the property. This is where your real estate experience will be critical. Begin by thinking about the property’s value and your client’s budget. Then consider the following factors:

➡️ Pressure to sell

Is the seller under any pressure to sell the property? For example, has it been on the market for a long time? Is it currently a seller’s market? 

Is it being sold due to a divorce or because the owner needs to move out of town for a new job? 

If so, then you may be able to put in a lower offer. However, this cuts both ways. If the seller is under no pressure, they may be willing to wait for a favorable offer.

➡️ Similar properties

Perform a comparative local market analysis to see how much properties in the area have sold for recently. 

A comparative market analysis will help you gauge the level of interest in the property and advise your clients on how much to offer.

You should compare properties at different listing stages as part of your analysis:

• Active listings: Check out listings in your area that are live but have received an offer. These prices don’t always reflect market value until they sell, but they do give you a good insight into what buyers expect to get for their properties.

• Pending listings: These are listings that are under contract but have yet to close. This can give you an idea of how the real estate market in your area is performing.

• Sold listings: These sales will give you a clearer idea of market value. In this case, don’t consider anything past six months of comparable sales data, as this can skew your analysis.

• Withdrawn listings: These are properties that have been taken off the market. You won’t know exactly why they’re no longer live, but you may be able to spot some common trends.

When you’re considering these listings, look for similarities between these properties and the one your client wants to purchase. For example, review properties of a similar size, location, and age to get an idea of what to offer.

➡️ Property condition

Does the home require any repairs or renovations? If so, try to estimate the cost of making them as accurately as possible. 

Your clients could factor this into their budget, ask for money off, or even ask the seller to make the necessary repairs as a concession of the sale. 

➡️ Market conditions 

If the current market is hot, then your clients may have to offer an amount above the asking price to be considered. But if the market is slow, then you may be able to offer the asking price below.

2. Set contingencies 

These are clauses in the sales contract that allow your clients to walk away from the deal without losing their earnest money deposit. 

They are based on things that need to happen for the sale to occur. For example, financing is a common contingency because the buyer needs to be able to exit the contract if they cannot get a mortgage loan to buy the property. 

Other common contingencies include: 

• Appraisals.
• A home inspection.
• Titles.
• The home sale.

However, in a competitive market, many buyers are removing contingencies from offers to help make their offers more attractive to sellers. This does come with some risk, though, so be sure to discuss this with your clients in-depth first.

3. Set an earnest money deposit

It’s at this phase of the process that your client will need to decide how much earnest money to offer.

Earnest money is a deposit your client makes when buying a property using funds from a mortgage lender. It shows that your clients are serious about buying the property. 

This money is held in an escrow account until closing. Earnest money deposits are typically around 2% of the proposed purchase price. 

Sometimes, providing a higher amount can help get your offer accepted, as it shows the seller that your client has cash and can comfortably afford the purchase.

The earnest money deposit will eventually go towards the down payment or closing costs when the property is sold. Sometimes, the seller will pay some of the buyer’s closing costs to make the deal more attractive.

4. Write an offer

The offer letter is sent to the seller’s real estate agent and needs to include:

• The address of the property.
• The name of your clients or anyone who will be on the title.
• How much your clients want to offer.
• A list of contingencies.
• A list of concessions.
• A list of items to be included in the sale.
• The earnest money deposit amount.
• Your clients’ mortgage loan approval letter.
• The expected closing date.
• The date your clients want to move in.
• A deadline for the seller to respond to your client’s offer.
• The property sale price terms, such as cash or obtaining a mortgage.

5. Negotiations

Once the seller receives your offer, they will either:

• Accept it.
• Reject it.
• Make a counteroffer.

If the offer is rejected, your client will no longer be considered a would-be buyer. If the seller accepts it, then you move on to the closing process. 

But if they make a counteroffer, then you are in negotiations. It’s usually a good idea to contact the listing agent to understand what the seller wants and if they are willing to negotiate further. 

Try to find out if there is any pressure to sell that you could leverage, and remember that you don’t just need to negotiate the purchase price. 

For example, your client may be able to lift some concessions, pay some of the closing costs, or extend their moving-in date to make life easier for the seller. 

Negotiations will eventually lead to your client’s offer being accepted or rejected. 

6. Sign the purchase agreement

When an offer is accepted, or your client accepts a counteroffer, your client signs the purchase agreement. This means the property is under contract. 

This period of time is known as the contingency period and is when inspections, appraisals, or anything else in your purchase agreement will take place.

7. Closing the sale

Once the seller has accepted an offer from a buyer, the next step is to close the deal. This can be a challenging part of the transaction. You’ll want to ensure you’re by your client’s side throughout this process.

Here are the steps to follow:

👉 Attend a final inspection

When a property is under contract, a final home inspection must take place before the sale is finalized. 

The reason for this inspection is to find any issues or defects with the property that the seller may need to address before the sale is complete. 

It’s a good idea for both the buyer and seller to be present at the inspection to ensure it’s completed and that it covers all the areas of the home.

Ensure you arrange a time for the buyer and seller to meet at the home for the inspection promptly to keep the transaction process moving smoothly.

👉 Final negotiations

As part of the home inspection, a licensed inspector will thoroughly inspect the property. They’ll check things such as:

• Structure.
• Electrical systems.
• Plumbing.
• HVAC system.
• Other components of the house that could affect its safety or value.

The inspector will create a report that details any problems or defects they find.

If the report includes any issues, your client will need to negotiate with the seller to address them.

For example, if the inspection found a small leak in a kitchen plumbing system, the seller either needs to repair the problem or change the property’s price to allow the buyer to make these repairs. You should use your expertise here to guide your client in this negotiation.

If the inspection doesn’t identify any issues with the property, or if they were found earlier in the process and addressed, further negotiation won’t be necessary.

👉 Sign the necessary documents

After the final inspection and negotiations, it’s time to complete the sale. This part involves a lot of paperwork that must be signed, completed, and exchanged.

Let’s look at some of these documents:

✍️ The property deed

This is a legal document that transfers the ownership of the property from the seller to the buyer. 

It includes important details like the names of the current and previous owners, a legal description of the home, and other information. 

When the property is sold, the seller transfers ownership by executing a deed. After it’s signed, it becomes public record and establishes new ownership.

✍️ The purchase agreement

This agreement outlines the terms and conditions of the real estate transaction between the buyer and seller. 

It’s a binding contract that includes all the agreed-upon terms and conditions for the sale of the property, such as the purchase price, the closing date, the type of property, and any contingencies that must be satisfied before the sale closes.

✍️ Property tax bills

If the property is connected to any municipal sewerage and water, there needs to be proof that this has been paid before the deal closes. The same goes for any property taxes. 

State or local taxes are typically paid when the property title is handed from the seller to the buyer.

✍️ Final utility readings

Aside from settling other bills, the seller must also take final readings on any gas or electric meters on the property. 

They must provide these readings to their service providers and the new buyer. This makes it easier for buyers to set up their new utility accounts and provide accurate readings from their move-in date.

✍️ The title insurance policy

Your client and the seller will have checked the titles and policies earlier in this transaction to ensure there’s nothing missing. Now, the home’s title insurance policy is given to the buyer. 

This policy protects buyers from any potential losses that could result from property ownership disputes.

Both your client and their lender will need a copy of the title insurance policy.

✍️ Service records and warranties

The seller must provide any service records or warranties for fixed appliances and any completed maintenance on the property.

✍️ A final property survey

The property survey confirms that all the relevant closing documents describe the correct home. It ensures all parties are on the same page and that both the buyer and seller are happy to proceed with the sale. 

The seller gives the buyer this final property survey just before closing the deal.

How To Manage Real Estate Offers with Purpose-Built Software

Now that you understand what the offer process looks like, let’s look at how you can efficiently manage your workload while dealing with hundreds of them simultaneously. 

The most efficient option for a high-producing or experienced real estate agent or broker looking to manage offers is to use software designed specifically for their industry. 

With purpose-built software like Paperless Pipeline, you can quickly and easily create a real estate transaction for your active buyers and have a central hub to store important documents such as offers, pre-approval letters, and more.

With Paperless Pipeline, you can organize all rejected offers in the dashboard view of what’s pending or what’s been accepted.

Offers or other documents can be seamlessly emailed through the Maildrop feature, saving you time that would otherwise be spent manually transferring documents to folders on your computer.

You can also use this transaction to store your client’s contact information, along with any notes specific to their wants, needs, or requirements throughout their home-buying journey. 

Additionally, you can stay on top of all of your to-dos by creating a custom checklist with relative due dates to ensure nothing falls through the cracks.

If you’re not currently using transaction management software like Paperless Pipeline, there are still some excellent options for managing real estate offers through your personal tools or cloud-based storage systems.

How to Manage Real Estate Offers with Other Tools

You can also use other tools to manage the real estate transaction process, including the offer stage.

A benefit of using personal tools is that they are likely free or low-cost. However, for higher-volume agents or offices, these tools may make it quite challenging to scale efficiently. 

Email tools

For a real estate agent or broker just starting out, a great way to manage your real estate offers is through personal tools. One example of this could be your email platform, such as Gmail. 

If communication with your client is already taking place via email, it may be helpful to create a folder within your Gmail account to store any rejected or accepted offers for that specific client. 

Project management tools

You can also use organization and project management tools like Trello and Asana to manage the various steps in a real estate transaction, making sure the offer process is smooth. 

This also ensures you don’t miss any critical due dates or milestones in the transaction, which could lead to deals falling through.

Digital calendars

You may want to use a digital calendar like Google Calendar or iCal to plug in all the important dates involved in the transaction, such as home inspections or when specific documents need gathering and signing

A digital calendar can help you stay organized and on top of things, allowing you to plan and manage your time effectively. If you know when the most important dates are, you can work toward them to ensure a timely transaction.

Offer comparison tools

Offer comparison tools are designed to help real estate agents analyze and present multiple offers on properties. This software helps facilitate clear communication with your clients and enables you to make informed decisions.

Some offer comparison tools automatically generate a comparative market analysis using data from multiple listing services (MLSs), which can help with property valuations and assist your clients with making an attractive offer.

They provide a centralized platform that helps you create a strategic plan for presenting offers to sellers.

Examples of offer-comparison tools include Cloud CMA, RealScout, and HouseCanary.

How to Manage Real Estate Offers with Cloud-Based Storage Systems

Another option for managing your real estate offers is cloud-based storage systems. Two examples of this include Google Drive and DropBox. 

Within these systems, you could create folders specific to your clients and their offers. 

A helpful piece of advice is to stick with a standard file naming convention for all offers. An example of this could be LAST NAME_FIRST NAME_ADDRESS_DATE. This will allow you to quickly find the offer you need without wasting time sifting through many files. 

While a solution like this may work well for agents closing somewhere between one and two transactions per month, higher-producing agents would undoubtedly benefit from a transaction management system built specifically for all of their real estate requirements. 

Manage Real Estate Offers with Paperless Pipeline

Whether you’re just starting or you’re a seasoned real estate professional, you need the right tools to close a transaction successfully. 

This helps you keep buyers satisfied at each step of the transaction and ensures you meet every critical due date to ensure the sale doesn’t fall through the cracks.

Missing a milestone or not having documents completed or signed can quickly cause a deal to fall through. You’ll lose out on a sale and the commission you deserve, and you’ll have unhappy clients.

Paperless Pipeline is designed to help real estate professionals simplify, streamline, and manage the entire transaction process so that every deal closes on time.

Curious to see if a transaction management system like Paperless Pipeline will be the right solution for you? Put it to the test during a 14-day free trial and see just how simple it is to manage all of your real estate offers.