Comments Off | Monday, December 27, 2010
The contract of purchase, also known casually as ‘the offer’ is really a legal document for the purchase and sale of real property. It becoming binding when both parties agree to the terms in the document. The e quality of your offer is almost as important as the price you offer to buy that home. Poorly written offers reflect badly on everybody and lessen your chances as a buyer to get your offer accepted.
Here are 10 basic tips to guide you.
1. Use the Correct Forms
2. Determine Price
Barring extreme buyers’ markets or sizzling sellers’ markets, you will probably want to offer a bit less than you expect to pay. You can ask for guidance, but don’t expect your real estate agent to name a price for you. Picking buyer’s prices is not an agent’s job.
3. Make an Initial Deposit
In most states, to have a binding offer, you need to make a good faith deposit. It could be cash, personal check, cashier’s check or other modes such as personal property, real property, mortgages or unsecured promissory notes.
Spell out who will hold the deposit — almost anybody but the seller!
If your state has “liquidated damages,” the seller could be entitled to retain your deposit if you default under the contract.
4. Disclose your Down Payment
Your down payment could be cash, promissory notes, stocks, real estate or other assets. Generally, it is readily available cash. Some states require verification of your down payment within a certain time period.
5. Name Financing Terms
Please remember that your deposit, when added to your down payment and financing should equal the total consideration paid. Disclose the type of financing you hope to obtain: conventional, FHA, VA, contracts of sale, assumption or other.
6. Include maximum points, especially if you are asking the seller to pay them.
7. Include Contingencies
California Association of Realtors (CAR) purchase contracts in California give the buyer by default 17 days to do inspections. Other states are similar.
Many contracts carry provisions for such contingencies as:
· Appraisal
· Loan Funding
· Physical Inspections.
· Depending on your state law, if you do not remove your contingencies in writing, they may still be in effect, all the way to closing!
8. Under when possession happens
Is it on closing? A day after closing?
9. Understand Who Pays the Fees
10.. Request Special Reports