In this post we reveal the Top 9 Tips for Writing Purchase Offers
Once you have your financing in order (or cash), the next step in buying property is writing up an offer.
Often times people don’t realize how important the offer contract can be when buying real estate. If you have a poorly constructed offer it can cost you getting the property you want, while at the same time a well written offer can get you the property you want at the price you want!
Try using following tips as a guide to creating a great offer:
1. Get the right Contract
This might seem basic, but there are several purchase contracts out there. Each state has its own rules and regulations and each contract is written differently. Realtor associations publish purchase contracts. If you are looking to buy in California, please contact our team and we will help you get set up with the correct forms.
Some example purchase contracts would be:
–New Construction Residential Purchase
–Agreement Notice of Default Purchase Agreement
–Residential Purchase Agreement
–Residential Income Property Purchase Agreement
–And many more
2. Determine what price you want to offer
Take a look at what comparable properties have sold for along with the current market conditions and come up with what you think is a fair offer price. TIP: Initially offer about 5-8% less than you expect to pay, this will give you some room to negotiate and possibly get an even better deal. Once you submit the offer be prepared to move quickly, in today’s market the good properties are being sold very quickly.
3. Put down a deposit
You will need to make a “good faith” deposit. This deposit will generally be cash, personal check, or cashier’s check. On average the deposit amount should be at least 1% of the sales price. This money (proof of funds or a copy of the check) will be submitted with your offer.
4. List your Financing Terms
Disclose the type of financing you hope to obtain(if you are not paying cash): Include the amount of money down and the type of loan (conventional, FHA, VA, contract of sale, assumption or other). Please remember that your deposit, when added to your down payment and financing should equal the total paid.
Contingencies are: Conditions or “safety valves” written into your Real Estate offers that protect they buyer from buying a house that is unsatisfactory (either structurally or financially)
Many contracts also carry provisions for contingencies as: Appraisal (California gives 17 days to complete all inspections) Loan Funding Physical/Home Inspections.
6. When do you take possession of the property?
Spell out the possession date. Is it on closing? A day after closing?
If possession will be prior to closing, enter into a rental agreement to protect all parties. If possession is more than two or three days after closing, execute a rental agreement to protect the buyer.
7. Negotiate Who Pays the Fees
Even though most contracts call for fees to be negotiable, some fees, depending on your state, are customarily paid by one party or the other. You can define who pays fees such as title, escrow, and county or city transfer taxes. In most cases the Seller will pay the fees.
8. Request Special Reports
If you are concerned with any part of the property, ask for a Special Report Upfront. Example Reports: Termite Report, Lead based paint report, and Mold inspections
9. Clearly State Expiration of Offer
Clarify when the offer will expire. You will want to give the seller enough time to make their decision, but not to take their sweet time.
If you would like more information or have questions on how to write up a perfect offer please contact me anytime!
Your friends and local real estate experts,
Oliver, Sam, Sandro
The Home Team
Contact us today:
Oliver Graf – Direct: (760)237-8006
Sandro Natale – Direct: (949)290-2599
Sam Khorramian – Direct: (858)518-1533
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Big Block Realty
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