Make an Offer to purchase Real Estate

Ready to Make an Offer on Real Estate

If you are ready to make an offer on Real Estate the most important thing is WRITE IT DOWN! This is the first, most crucial and most basic step in making an offer on a real estate property.

Determining Terms and Price:

Ok you found a home you like and ready to make an offer to purchase, now let's determining the offer price and terms to negotiate.

I can perform a Real Estate market study to determine estimated price of this property. Obviously there are several factors to consider other than price when making a real estate offer. We also want to set some terms (or contingencies)

The Offer:

The first thing you should do is start with a written offer. It's called an offer, because the seller's have not yet signed. Having all of the terms written down prevents and unexpected misunderstandings in the future. Well, it doesn't prevent them, but it makes them easier to clear up if they arise.

The offer will not only list the price, but it will also list any other features that you hope will end up on the contract. This could include the seller's commitment to help with the down payment or any stipulations like if the price is contingent on a new roof, inspections, condo association approval and a host of other terms and conditions.

As a licensed Realtor, I have all the forms and contracts that from the Florida Board of Realtor to insure that you don't miss any steps in the process. These real estate forms also insure that the mortgage agreement and selling points are compliant with Florida real estate laws. If you are buying a property in another state other than Florida there may be some differences.

Of course as your Realtor brokering the deal, I will handle many of these duties, but it is always best to know what you are doing.

The Real Estate Contract

Once you make an offer on Real Estate, the seller must accepted it. If it is accepted and the contract is signed, you are both legally bound to comply with every aspect of the contract, even if situations change.

A real estate contract provides for a host of The contract will also provide the blueprint for the final sale. This should contain; Address and legal description of the home, agreed sale price, terms of the real estate sale, all down payments and mortgage conditions, seller's promise to legally hand over the title of the land and improvements, a target date for the closing of the sale, amount of escrow deposit. The Real Estate contract should also specify whether these escrow funds would be delivered in the form of cash or check, when their deposits are due, and who will hold these escrow funds. You must also specify how that money will be returned if the deal does not go through, and how that money will be paid if you brake the contract.

The Contract also stipulates the method by which all insurance, property taxes, fuel, water bills, and any other utilities with be transferred from the seller to the buyer, who will pay for independent inspections, the type of deed to be given, any state specific clauses. For instance, attorney review of the contract and disclosure of any hazards such as fault lines, flood plains and contamination A time limit that, if passed, nullifies the Contract CONTINGENCIES (very important)

Contingencies

Contingencies are what we call "deal breakers". Essentially they are things that if not fixed or dealt with before the sale of the home, the contract becomes null and void. While a contingency can be anything the two most common contingencies are as follows:The buyer must obtain a specific lending agreement from a bank or other lending source. If a suitable loan can't be found, there is no way to pay for the home, therefore it is unreasonable to expect a purchase. An independent contractor completes an inspection. If he determined that portion of the contract was not met (e.g. fixing a roof) then the contract again becomes null and void.

It is contingencies that make writing all of this down so important. If it s not in writing, you could find yourself in an extended legal battle that could be so expensive it will leave you homeless in more ways than one.

Negotiating

You are going to want to be in best bargaining position possible when you make an offer in a home. This will most likely be the largest investment of your life and poor negotiating can mean the difference between thousands of dollars.

If you can hit the negotiating table armed with the following you are bound to get a good deal:

You are willing to pay all cash, You are pre-approved for a mortgage, Your purchase of the property is not contingent on the sale of your existing home.

If you have any of these criteria you are instantly the sellers best friend and they are likely to reward you for it. Especially in a buyer's market. If you happen to be in a sellers market having all three criterias could also get you the property versus someone who may only have two; providing your bids are close.

If you know you are going to be negotiating it is a good idea to know what is motivating the seller. If they are desperate, or even just highly motivated this can also work in your advantage. How can you tell if a seller is motivated? Try the following.

Is the home for sale currently vacant? If it is they are probably paying two mortgages. They will be eager to ditch one of them.

Was there a recent divorce? Nobody wants to prolong the painful ordeal of a divorce; this could work in your favor.

Estate sales. If the family of a recently deceased individual wants to settle the estate, they too will be eager to sell the property quickly.

Earnest Money

This is not a down payment. It is instead a smaller sum which, if written in the agreement can give you sole bargaining rights for a specified period of time. The money is usually help by the realtor or closing agents in escrow and is normally added to the down payment or subtracted from the your closing costs if the sale goes through.

Offer/Counter-Offer

When you make an offer you are legally bound to it (if accepted without modifications). This is part of the negotiation. If you make an offer and it is rejected or not accepted within the acceptance period, that's that. It's dead. In some cases the seller may send back a counter offer. You may then choose to accept it or reject it. But unless the seller agrees in the contract, the counter-offer is merely a means of communication; not a binding document (unless accepted by the buyer without modifications). As your Realtor I can explain this in more detail when we are ready to make an offer on Real Estate.

Withdrawing An Offer

If not working with a Realtor, you will need to contact your Real Estate lawyer about this one. Roughly the answer is yes. You can withdraw your offer. For instance, if you send a offer or counter offer and that is accepted by the seller you can change your mind at the last minute, even if the offer has been accepted. The only thing that does matter is that you do not know that they have accepted the offer. The minute you know the other party has sign the Real Estate contact you are now legally bound to that contract. You can still appeal to the good nature of the seller but this is no guarantee.

One Last Thing

As a buyer, never underestimate the desire of your seller to sell. They may be a master negotiator, but still desperately want to get the property of their hands. Naturally, one of the biggest problems you will face is getting the down payment, earnest money, moving fees and inspection costs all together before you move.

If you think that maybe you are at an impasse with the seller because the market price for the house is well above the appraised price (thus requiring a larger than though down payment) you should mention the option of having the seller pay some of the up front costs.

For instance: When you make an offer ask them if they will pay the initial costs of the following.

Termite and infestation inspection, Home protection policy, Buyer's closing costs, Survey, Points to the buyer's lender, Repairs mandated by the lender. When we are Ready to Make an Offer on Real Estate we'll discuss all these terms and conditions.


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