Thursday, July 2, 2015

5 Things to Know About Making an Offer

So you found the right property, now your thinking about making an offer. Here are a few things to know when making an offer.

5 Things to know about making an offer


1. Take Time to Think About it--but not too long:
Review the "Sold" comparable properties for the last six months in the area.  How long were the homes on the market? How many comparable homes are under contract? How many comparable homes are actively listed?  Use this information, provided by your realtor, to help you determine if you have time to wait or if you are likely to lose the home to another offer if you don't act quickly.

The real estate market is always changing.  Work with your realtor to know how quickly you should make an offer.  Sometimes offers are made site unseen due to the low inventory of homes, so be ready, if needed, to quickly make an offer.





2.  Negotiations:
Often the initial offer is not what is accepted and the final price is negotiated.  Remember to always put in writing sufficient addenda with all the necessary signatures before moving forward.  If it isn't in writing don't "assume" it is understood, will be remembered or will hold up in court (heaven forbid).

Remember George Bernard Shaw's statement, "The single biggest problem in communication is the illusion that it has taken place." 


3. Earnest Money:
When you make an offer and it is accepted you need to deposit an earnest money check (the title company or, in some states, real estate broker will hold the deposit). The earnest money tells the seller that you are serious and goes toward funding your down payment. By requiring earnest money sellers can ensure that their house is not taken from being actively listed on the market by someone who is only slightly interested. If, for any reason, you get out of the contract during the Due Diligence period typically you will get your earnest money returned.  Check your local and state laws for any variance such as a cancellation fee.

More info at: realtor.com

Earnest Money is what opens Escrow:
To put it simply escrow is a deposit of funds into an account by one party (buyers) to be delivered to another party (sellers) when a specific condition or event takes place (closing of the sell of a home)

4.  Notify Lender & Title Company:
Provide a copy of all contract documents, including your brokerage contract, to the lender as well as the title company.  Also obtain the other party's title company contact information and share related documents.  When in doubt, contact any specific party and share contract information.  Nothing is worse than the underwriter saying they only have one addendum and it is the day before the closing.

5. Remember Due Diligence:
During the Due Diligence period it is critical that you put great effort into analyzing the home and deciding whether you should continue moving forward.  A home inspection and title report are typically the main things that must be completed during Due Diligence.  Additional things to consider doing are obtaining well permit and water share documentation as well as any zoning issues including easements or right of way over the property.


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