Signing Contracts

Processes and cadence for getting offers signed. There are 2 main ways contracts get signed, online or in person and processes vary slightly for both.

General rules:

  1. Dont refer to contracts as “contracts” when speaking to the seller. PSA or “agreement” sounds less committal and threatening.
  2. Move to get contracts signed ASAP if you receive verbal acceptance. If on doing online, have the contract sent while they are on the phone or within 10 minutes after. If in person, go that day if possible.
  3. Due to the nature of buying discounted properties, it i hard to legally enforce our contracts. Understand getting the signed PSA is only the start. Dont count the money before its in your account.
  4. If there are multiple signers, try to discuss with them both at the same time or have both sign at the same time.

Process:

Online Signing

  1. As soon as you receive verbal acceptance of an offer, get the written PSA sent to the seller.
    1. If possible, send with them on the phone. You can guise this as “I just want to go over the specifics to make sure you dont have any questions”
  2. Ideally use a software like PandaDoc that allows you to send via both Email and with a text link in case there are Email or computer limitation.
  3. If you are unable to send while on the call, be sure to set a time that you will follow up. Ideally this time should be same day or shortly after you send.
    1. “Hey I’ll send it here in about 15 minute, I’ll give you a call back to go over things when I do”
  4. When going over the contract, it is ok to walk line by line and see if they have any questions. If so address them appropriately.
    1. Common points of contention are:
      1. Inspection Period - “I thought you said no inspections!”
        1. “We dont do a formal inspection, just a walk through to verify condition”
        2. If you have already walked property you can choose to waive the inspection clause or keep it open because “You just need to make sure your contractor gets eye on it”
      2. Earnest money - “Your earnest money is too low!”
        1. Don’t be afraid to increase earnest money. Just be conscious of inspection and due diligence timeframes during the transaction if there is any risk of not closing.
      3. Items in Property - “I have X items left in there”
        1. Read the room. Offering to take care of the item or giving them time to remove them can both be perks depending on the sellers situation.
      4. Timeline - “Not sure if i can find a place by then”
        1. Ideally you will offer a rent back, this will be written at the end of the PSA. Rent backs are preferred over extended closings as taking title gives you power over the property. If doing a rent back, a significant portion of proceeds can be with held to incentivize the seller to move out. If doing an extended closing, discuss action dates for them getting out before closing.
  5. If there are multiple signing parties, try to get them both signed at the same time. If not possible, plan to have signing calls with each person separately.
  6. If seller is unwilling to sign, don’t panic. Set a follow up timeline for them to consider. Inquire about their hesitations and work to find a mutually beneficial outcome.
  7. Once seller signs, get into escrow right away and have escrow reach out to seller to get Seller Disclosure package signed ASAP.

In Person Signing

There are many reasons sellers will want in person signings. Situations can arise from not having/understanding computers, identification needing to be verified, or even they “just want to know who they are doing business with.”

Many processes as above the same with exception to the following:

  1. If signing before walk through, try to line up photo session with in person signing.