Home Worth?
Buyers
Sellers
Links
And Tracy
| Home | Home Search |
What's Your Home Worth? |
Just For Buyers |
Just For Sellers |
Recommended Links |
About Neal And Tracy |
Area Subdivisions |
|
|
Writing an Offer to Purchase Real Estate
Once you find the home you want to buy, the next step is to write an offer, which is not as easy as it sounds. Your offer is the first step toward negotiating a sales contract with the seller. Since this is just the beginning of negotiations, you should put yourself in the seller's shoes and imagine his or her reaction to everything you include. Your goal is to get what you want, and imagining the seller's reactions may help you attain that goal. The offer is much more complicated than simply coming up with a price and saying, "This is what I'll pay." Because of the large dollar amounts involved, especially in today's litigious society, both you and the seller want to build in protections and contingencies to protect your investment and limit your risk. The Arizona Department of Real Estate contract does just that. Ask your Realtor for a blank copy of an AAR contract before you find a house so you can read it. It takes 1-2 hours to fill out the contract and various addendems required for the sale. If you have multiple questions and your Realtor has to explain each and every item, it can turn into 4-5 hours! In an offer to purchase real estate, you include not only the price you are willing to pay, but other details of the purchase as well. This includes how you intend to finance the home, your down payment, who pays various costs, what inspections are performed, timetables, whether personal property is included in the purchase, terms of cancellation, any repairs you want performed, which professional services will be used, when you get physical possession of the property, and how to settle disputes should they occur. It is certainly more involved than buying a car. And more important. Buying a home is a major event for both the buyer and seller. It will affect your finances more than any other previous purchase or investment. The seller makes plans based on your offer that affect his or her finances, too. However, it is more important than just money. In the time it takes to write an offer you are making decisions that affect how you live for the next several years, if not the rest of your life. The seller is going to review your offer carefully, because it also affects his or her future decisions. Earnest Money Deposit After you have come up with an offer price, the next step is to determine how large a deposit you want to make with your offer. (We recommend 1-1.5 % of the purchase price.) You want the "earnest money deposit" to be large enough to show the seller you are serious, but not so large you are placing significant funds at risk. Just in case there is a nasty or prolonged dispute between you and the seller, the less money you have tied up in a deposit, the fewer funds you have placed at risk. During a hot market there may be multiple offers on the property, and a large deposit may impress a seller enough so they will accept your offer instead of someone else's. You may also find that by making a large deposit you can convince the seller to accept a lower offer. More money up front may save you money later. Just something to think about... There are also times when closing can be delayed by weeks, through no fault of your own. Have back-up plans prepared for such a contingency. Inspections You Should Require You and your Realtor should schedule a pest inspection and your lender will probably require it. You should also have a professional home inspection. Your Realtor can help you with recommendations. Of course, you will have inspected the home, but you are not used to looking at some things that a professional will find. Even if they are not things the seller is expected to repair, at least you will have the advance knowledge of any potential problems. Also, keep in mind it may be wise to conduct additional inspections such as, lead based paint, pool/spa, gas heat exchanger, roof or mold. You have 10 days after your offer is accepted to have any and all inspections performed. Once you receive the inspection report, review it as soon as possible. If you do not approve of certain items in the report, you may negotiate with the sellers on which repairs should be performed and who should pay for those repairs. You and your Realtor will fill out a form called "Buyers Inspection Notice and Sellers Response". This is where you put in writing any items you would like the seller to remedy or cancel the contract because the house is falling down! Remember, you have 10 days from the acceptance of the offer to complete any and all inspections and once you submit the buyers request for repairs, you can't add anything. It's a one time shot! Just to be safe, make certain you know the results of the pest inspection before you submit your request. Transfer of Possession A transaction is considered "closed" once the deed has been recorded. The purchase contract provides for possession to be at close of escrow unless both parties agree on a different date. Sometimes it is not possible for you to occupy the home immediately. This can happen for several reasons, but the most common is that the seller may be purchasing a home, too. Sometimes, it is scheduled to close simultaneously with your purchase of their home. There may be as many as three transactions riding on the successful closing of one property! |
