How long does it take to prepare an offer? Recently I wrote about how much time it takes buyers to put an offer together in Silicon Valley. But I didn’t go over how much of the buyer’s agent’s time is involved with drafting the bid In Silicon Valley, it’s a lot more than just typing up the contract and emailing it to the listing agent.
The first time I write an offer with a buyer, it may take me about 10 – 15 hours, sometimes 20 or more, because there’s a lot of information that will need to be explained, such as what is needed with the proof of funds, or going through the boilerplate disclosures that will be found on every sale (or most sales).
How long does it take to prepare an offer? There’s more to do than you may realize!
Here are some of the places where that time goes:
- Getting the electronic documents set up for completion and signing on ZipForms. Depending on whether or not we can import some of that info from the MLS, it may take a few minutes to hand enter everything (and to double check the seller’s name on the preliminary title report). Then we need to make sure that we load the forms required to write the offer, and required by our brokerage, into the area actively used for drafting the offer. Usually this is 10 minutes or so.
- Researching the areas (we usually pull the Realist Report, check Google Maps, check satellite and street views, and will look at online natural hazard disclosure info when the disclosure package is not yet read ).
- Pulling comps (comparable properties) could be anywhere from a half an hour (if properties are not reviewed individually and it’s simple, such as a condo with the same floorplan that just sold ) or 2-3 hours or more if your agent does a deep dive and it’s a custom home / lot / anything unusual going on or no recent solds nearby. Recently I spent about four hours on pricing alone since inventory and sales are so low. That makes it harder and more time consuming. When possible, I will phone the listing agent of pending sales and that also takes time but can be invaluable when prices are rising fast.
- Providing you market information (stats from sites I use, stats I crunch directly from the MLS, but also finding out from the listing agent how many offers may be expected, how many disclosure packages are pulled, etc.) at least 30 minutes, possibly a full hour.
- Doing an Agent Visual Inspection Disclosure (visiting the property, taking notes, photos, type up, electronic signing) at least 1 hour, probably 2. The last time I timed myself just typing up the AVID it was around 45 minutes because I am diligent and want to be thorough.
- Reading the disclosures: if skimming before deciding to see a house, just a few minutes. But when a client is serious about buying, I will spend an hour or two on a basic disclosure package. The home inspection summaries often do not mention important things like whether or not the electric panel is a brand that warrants replacing, or if there are signs of drainage issue which may be expensive to fix.
- Discussing with buyers the disclosures and inspections, pricing thoughts, terms of the offer, and questions that need investigating: at least 1 hour (usually several emails plus a phone call or video chat). In some cases I need to do further research, or the buyer does, to better understand something in the disclosures or inspections.
- Talking with the lender, if applicable, and getting the pre-approval offer included and coaching the lender to call the listing agent after the offer is submitted – a few minutes.
- Tagging the disclosures for electronic signing (seller’s disclosure package, buyer agent’s company forms, plus the Agent Visual Inspection Disclosure) 1 – 2 hours, depending on how the listing agent has put the disclosure package together. Some have a signing package, others don’t.
- Doing a contract review with the home buyer(s) – usually about 1 hour. If the buyers are first time home buyers, estimate 1.5 hours or more.
- Pulling together the proof of funds, making sure to white out what isn’t wanted or needed (bank accounts, individual transactions), combining pages and creating a summary sheet – estimate a half hour.
- Creating a cover letter / offer summary – just a few minutes.
- Combining PDFs so the listing agent doesn’t get 25 attachments – a few minutes.
- Often there are return trips to the property, either to show buyers a second time after reviewing the disclosures or do to a more thorough AVID, if we were rushed previously.
- Emails back and forth with buyers on a myriad of topics related to offers – varies, but all tolled, it is usually at least a couple of hours.
How long does it take to prepare an offer after the first or second bid fails?
If the home buyers don’t get the home they first offer on, it is a lot simpler and faster, probably half as much time with the second offer and a little less with the third. You cannot skip over the disclosures, the comps, the DocuSigning, but the contract itself will have decisions that come much faster.
Time is still needed to review the disclosures, pull the comps, and take care with drafting the offer. Even if rushing, it may take 5 hours of your agent’s time to do everything if this is done correctly and thoroughly.
When buyer agents submit partial offers, their clients often don’t stand a chance. A couple of months ago I had a listing that attracted a good number of offers. What surprised me was that some of the buyers and their agents simply did not follow directions. The private MLS comments stated plainly that the offers should come with all disclosures signed (including the Transfer Disclosure Statement and the Buyer Agent’s Agent Visual Inspection Disclosure), proof of funds, pre-approval letter (if there was a mortgage), and so on. One offer came only with the contract and proof of funds. Nothing else! I called him and he could not be bothered. Don’t be that buyer! Be thorough.
How long does it take to prepare an offer if I see a home the day the offer is due?
It is helpful to know at least 24 hours in advance of the offer due date that you want to write an offer, and that’s assuming you have already read the disclosure package and are comfortable with the condition of the property. It can be a stressful rush for everyone if you see a home on Sunday afternoon and offers are due on Monday morning.
A few months ago, I showed a home at 9 am to buyers even though the offers were due by 4 pm that day. That kind of rush forced me to sideline all of my other clients for pretty much the entire day. (It was multiple offers and no, they didn’t get it.) This was bad for them, bad for me, and also bad for my other clients who got pushed aside for about 8 hours.
What if you change your mind or aren’t really serious?
When buyers say to their real estate professional, “YES I want to write an offer on this home”, their agent will dive in and get to work. It is super important for both sides to be working in sync with each other. It must be a team effort for there to be success.
When you start getting the emails with the disclosures, the pricing info, and so on, it is really helpful (and respectful) to acknowledge getting whatever is being sent so your agent knows you got it.
Silence will cause your agent to wonder if (1) you aren’t getting the emails or (2) if you don’t value their time or (3) you changed your mind. Or other things. The imagination is a crazy thing sometimes. Bottom line is that silence can erode the relationship between you and your Realtor.
Got cold feet halfway through the process? Take a deep breath and let your Realtor know. Don’t wait until he or she has put in 10 hours worth of work, sent you everything for DocuSigning, and then either say “I changed my mind” or “my offer price will be 15% below where it needs to be – I just want to see what will happen…”
If you want to lowball homes to see what happens, that’s something your real estate professional should know up front. That way he or she has the option of letting you know that they don’t want to work with you – and to free you up to find another licensee. This is a VERY difficult market for home buyers (check the Santa Clara County real estate stats here), and most real estate agents will not want to waste their time on an offer which has no chance of success since even strong offers are usually beat out when there are 20+ bids on a home.
If something changes after you’ve told your buyer’s agent you want to write an offer, the best thing you can do is tell that person as soon as you realize that you either do not want to submit the offer, or that you are having second thoughts. Most Realtors have several clients and lots of work to do (there’s always more to do when you’re self employed). Please be respectful of your agent’s time.
How long does it take to prepare an offer? If you aren’t sure about buying the home, too long. Being interested isn’t enough.
In real estate we have a saying: “the confused mind says no”. If you are not sure about the property, it’s best to not write on it. If your offer is accepted when you have doubts, you may feel terrible instead of celebratory upon getting the news.