Simply put, these are when a home buyer and his or her or their agent write up a bid on a proper form such as the PRDS or CAR contracts, but orally or otherwise casually tells the seller or the listing agent of a price that the buyer would offer for the property.
- Communication from a buyer or buyer’s agent that the client would like to purchase the property for a particular amount of money.
- Sometimes they also include some of the contract terms, such as “all cash offer” or “no contingencies” or “30% down”.
- Most of the time, the buyer doesn’t want to spend the time to write it up unless there’s a verbal assurance that the seller will accept the offer.
- With a verbal offer (which could be in person, by phone, by email, by text, etc.), there’s no proof of anything – no proof of funds, proof that the disclosures have been reviewed, and so on.
This is a terrible idea, whether you’re a buyer or seller. But why?
Verbal offers are not serious offers
First, there are a LOT of terms in the offer besides just the price. They include things like the loan amount and percentage (80% loan to value ratio or something else), the amount of the initial deposit and when it will go to title, whether the buyer is preapproved or not, the number of days for various contingencies, how long the escrow should be, what personal property should be included, and much more.
Often those terms are extremely important. Consider just one: all cash versus financed! Verbal offers are usually only the price being floated by.
Written offers, not verbal offers, come from committed home buyers
If a home buyer is sincere and serious about purchasing property, he or she will get it in writing and be specific about the myriad of terms that are part and parcel of the agreement. A seller cannot fairly even consider a verbal offer because so many of the terms are simply missing in action.