I created this blog to have a place to share information, ideas, thoughts, and experiences, not necessarily just about real estate, but also life in general.

November 19, 2012

Writing A Purchase Offer. Step #5

Writing A Purchase Offer. Step #5
Writing An Offer
It is exciting when you finally find "your dream home"! It is also the time when you can so easily allow your emotions dictate what you want to pay versus what you can actually afford.

NOTE: if you need to secure financing for the purchase, check out Step #3, Get Pre-Approved By A lender. Most sellers require a copy of your loan pre-approval letter when the offer is presented.

Often, the seller may even call your lender directly to confirm. So having this upfront could only strengthen your negotiations with the seller.
This is one of the most important steps in your home buying process, so let's go through some steps to guide you through before writing your offer.

  • Walk Through of the Property.
Do a thorough walk through of the property again. Take note of items in the house that you want to include in your written offer, such as window coverings, appliances, fixtures. 

Pay close attention to repairs you want the seller to do before close of escrow. Don’t wait after your inspections to request for repairs. Ask for them upfront. If you'd rather fix them yourself after close of escrow, get an estimate of cost from a qualified third party vendor. The seller will most likely be more responsive to your request for credit of the amount towards your closing costs.

NOTE: If the property is being sold "As Is", this means the seller will not do repairs, although they are obligated to disclose material facts. Some may consider repairs for health hazard or safety conditions uncovered during your inspections, but don’t I wouldn’t hold my breath on this especially on “As Is” or REO properties. With this type of transaction, as a buyer, you’ll either accept the property in its present condition or walk away.

  • Decide On The Price You Want to Offer.
Analyze the information about the property and the area such as: the comparables recently sold in the neighborhood, location, amenities, condition of the property, and so on. Consult with your realtor, or do a research through the public records.

You might be tempted to offer a higher price especially with the current market drawing multiple offers. Remember to stay within the monthly payment you budgeted for and consider extra expenses like gas and electric, water, garbage pickup, which add up.

Some Other aspects on the Purchase Contract you need to be aware of.
  • Earnest Money deposit is a show of good faith that you are serious about your offer.
  • Allocation of Costs – defines costs that buyer or seller will be paying for.
  • Inspections and removal of contingencies period – state the deadlines involved.
  • Home warranty coverage – items included may be appliances, roof, air conditioning, etc.

A real estate agent can easily guide you through the purchase contract. But if you choose to do this yourself, you may want to consult a real estate attorney to assist you. Once you and the seller agree and sign on the terms of the offer, everything becomes legally binding.
Give the seller several days to respond after you've submitted your offer.

You may get a counteroffer for changes on terms and/or price. It’s also not unusual to have several counteroffers before a mutual agreement is decided. So be patient. More likely than not, parties are flexible as long as the terms are reasonable. If you can’t reach an agreement on terms, either of you can walk away at that point.

But, if you and the seller sign the full agreement of terms, it's time to do your "happy dance", and your escrow process begins. This is the period when you'll be receiving disclosures and reports from the seller. Your inspections and investigations are also conducted during this period. You want to pay attention to the deadlines as stated on your purchase contract.

No comments:

Post a Comment