The Basics Of Making an Offer
Crafting your offer is like crafting a proposal basically. There are all of the things that you are hoping for like purchase price as well as all of the legal things that you need to have in there to cover each party. Here is a breakdown of all of the necessary items you will want to have addressed.
What to include
It is important to cover all of the necessary basics in your offer because if it is accepted then it acts as the blueprint for the sale going forward. Make sure you have these items addressed:
-Address
-Sale Price
-Terms (cash v. finance)
-Seller providing clear title
-Closing date
-Earnest money amount
-How taxes, utilities, etc are prorated
-Define who will pay for services like title insurance, survey etc.
-Final walkthrough
-Time frame for offer expiration
-Contingencies
Contingencies
You can make your offer contingent upon a few things but the most common are the following:
-Financing. You will have to secure specific financing by a lender in an agreed upon time. If you cannot, then you will not be bound by the contract.
-Home inspection. The property should be inspected within a certain amount of time after the accepted offer. If not, the contract will become void so make sure these dates are recorded appropriately.
So what happens next? You have a binding contract if the seller accepts your terms. If they agree to all but perhaps just one or two things like the price, then you may receive a written counteroffer. This can go back and forth and will become binding when both parties agree to terms. Unless a seller accepts the terms as they stand exactly, they do jeopardize losing the deal should they counteroffer. This is a window of opportunity for a buyer to walk away should they wish.
Who pays for what is often defined by local custom but can be negotiated as well. These items may include:
-Termite inspection
-Survey
-Buyer closing costs
-Repairs required by lender
While sellers may feel these are not their responsibility, a contribution from them may help ease a deal through. Not all buyers, especially first time buyers, are often short on cash.