If in a negotiation you hear the seller say: “I’ve already been offered X sum of money,” and that amount seems somewhat unrealistic, ask if the offer was in writing.
It’s interesting how many times the response is, “No, it was not in writing.”
I would categorize a verbal offer as more of a fishing expedition, which is far less likely than a written contract to lead to a transaction that closes.
Here’s why . . .
Money talks. A written contract agreed upon by both parties needs to be followed up with a deposit.
It’s easy for a potential occupier to throw out an offer if there’s no requirement for them to follow up with financial consideration.
In a commercial real estate sale or lease transaction, there are several important finite details that are generally too cumbersome to agree to verbally.
Let’s say a seller or landlord believe they have an accepted oral agreement. The buyer or tenant must then place its intentions in writing.
It’s inevitable the recipient will be presented with terms and conditions that weren’t discussed.
There’s therefore much room for misunderstanding and loss of trust between the parties once all the detail is put forward.
A contract for the sale of property is not legally binding unless it is in writing and signed by both parties.
If a buyer makes an offer and a seller counters that offer, there is no agreement in place until both parties have executed it.
Many buyers believe that if a seller has countered their initial offer and has provided them a specific period to consider that counter offer, the seller is bound to honour that counter.
That is not the case.
The seller has the option (another more attractive offer could surface) to rescind the counter offer prior to the buyer accepting it, if they so choose.
There are times when it can speed the negotiation process to discuss a final price or term with the other party prior to documenting it.
Just remember that even if you believe you have a verbal commitment between buyer and seller, there is no deal until those terms are papered and executed.