Thursday, February 20, 2014

Writing an Offer to Purchase a New Home

After you've looked at a few homes and you've fallen in love with one (often the first one you looked at), it's time to sit down and write up an offer. Each association and/or state will have a different purchase agreement. You might ask your agent for a copy of the purchase agreement to read over before you fill it out. There are a lot of decisions to make.

A few things you want to think about before sitting down to write the offer are:

1. The price you want to offer. And the highest and best offer you're willing to make. You may get a counter offer and you need to be ready and know how you're going to want to handle it.

2. You can ask the seller to pay a portion of your closing costs. Each loan has different limits and you'll want to ask the lender what your limit is. If you don't have enough cash to close the seller can help you out. Often the amount is 3-6% of purchase price. But be sure to ask your lender what your limit is. You'll also want to know the difference between closing costs and down payment.

3. What inspections do you want to have done? You can have just about anything inspected by a professional. The typical inspections include a Whole House, Furnace & Air Conditioning, Termite or Wood Destroying Pests, and a Radon Test. But if you're questioning the roof or foundation you can have a licensed contractor take a look at those specific things. If the home has a fireplace, you can have that inspected individually as well. All inspections costs money, so be prepared to pay $100 to $500 for each one. Your agent will know what's typically charged for each.

4. Is there anything in the house that you want to include in the sale? It's fairly standard in the Lincoln, Nebraska area to leave the carpet and window coverings. But it's a good idea to write in the stove, refrigerator, microwave oven, etc. Those items are often offered by the seller and listed in the data sheet your agent has access to. But what if there is some beautiful bedroom furniture that you'd love to have as well? It's okay to ask for it. Your agent will know the best way to make that request.

5. Closing date. Do you have a lease that's expiring? Have you sold your home already and need a quick closing? Your closing date is also determined by your type of loan and lender. Each lender has different underwriting processes and timelines. You need to ask your lender how much time they need. You can write in any closing date you want, but being realistic will help keep everyone calm and on track. An unrealistic closing date will only upset the seller and cause more stress for everyone if it doesn't close on time.

Now that you've filled in all the blanks consider how your offer looks to the seller. If you've offered thousands below market value and asked for thousands in closing costs and the washer and drying and lawnmower, you might offend the seller. They have the 3 options. Accept your offer, counter your offer, or decline your offer. The best case scenario is that they accept it. So you want to write an offer that is worth them accepting. The second best option is that they counter your offer. Be prepared for a counter and know what it is you're willing to give and take on. And finally, they can just outright decline your offer. If you're asking for too much, they just might do that. You can always right a new offer, but be prepared for the seller to stand their ground.

My advice for buyers is that the more you ask for in an offer, the more you should be willing to give. If you want the washer and dryer and the lawnmower, you might have to consider giving more than asking price. And if you're requesting a significant amount of assistance with your closing costs, you may have to make a full price or more offer. Just remember, if you're asking for a lot, you're also financing those things for 30 years (or whatever loan term you have). You might be better off bringing your old rickety lawn mower to the new house rather than financing this one for a long period of time.

If you have questions about making an offer, call me any time at 402-239-9668 or visit my website at www.Shellyn.net