When you think you’ve found The One, it’s time to act quickly and put together an offer. An offer entails much more than just the purchase price. Different offer terms matter to different Sellers; this is why I will do as much research in advance to help us determine what is important to the Sellers and how to present the strongest possible offer.
Purchase Price
I will help you evaluate the property’s price as compared with other recent sales in the neighborhood. The report I’ll prepare fNor you is called a Comparable Market Analysis (CMA). It’s important to know that a CMA is not an appraisal and not intended to be used as such. If you’re getting financing to purchase the property, an appraisal will most likely be required by the Lender, at which time the property value will be verified by an independent third party Appraiser. Having an appraisal done is a nice safety net for Buyers, and will help ensure that you’re not overpaying for the property you are buying. {Read More About the Difference Between an Appraisal & A CMA - link}
Earnest Money
How much money are you comfortable putting down on this property? You will pay your earnest money deposit to the title company within 3-5 business days of the Seller accepting your offer. At the Oregon Coast, earnest money is typically around 1% of the purchase price, but it can vary from transaction to transaction. A higher earnest money deposit tells the Seller that you’re more serious about purchasing their property. These funds represent liquidated damages that would go to the Seller if you don’t perform the contract as written. But don’t worry, the Sale Agreement is a buyer-protection document and there are many contingencies that may allow you to back out of a property if it turns out not to be what you expected at the outset. Assuming that you complete the purchase, the earnest money deposit will eventually be applied towards your down payment or closing costs.
Down Payment
The lender you’re using will usually help determine what down payment is required, depending on the type of loan you’ll be using. The down payment won’t be due to the title company until a few days before closing. As with earnest money deposits, a higher down payment indicates to Sellers that you’re more financially able to purchase the property. Some loans may allow you to receive gift funds from family members to help with your down payment, so be sure to speak with your Lender in advance if you plan to use gifted funds towards your down payment.
Closing Cost Credits
With a strong offer, it’s sometimes possible to request that a Seller give you credit to cover some portion of your closing costs. If no credit is given by the Seller, you should expect to pay closing costs with cash out-of-pocket at the end of the transaction. If you have questions about the specific estimated closing costs for a property, be sure to ask your Lender.
Home Warranty
Is a Home Warranty important to you? It’s possible to request a seller to pay for this, or if they won’t, you still have the option to purchase the policy yourself. {HYPERLINK: What you need to know about Home Warranties}
Contingencies
Do you need to sell a house before you can purchase this one? Are there any financial contingencies I need to be aware of to protect you when presenting this offer? This is important information for me to have up front, so please make sure to keep me in the loop
Closing Date
At the Oregon Coast, most real estate transactions take 30-45 days to close once an offer has been accepted, although cash purchases can be completed much more quickly. Some Sellers want to sell ASAP, and some prefer to wait a few months to get their affairs in order. As such, we will consider your timing needs for closing the sale and your desired moving schedule as art of the whole transaction.
Ownership
Decide how you want to hold ownership and who will be involved. Will you be purchasing as an individual, married couple, two non-related individuals, or will you be purchasing the property as a LLC or Trust? This is a discussion we need to have before putting in an offer, as legal and contractual requirements may be different for each option.
Once we have discussed all the details, I will complete a Sale Agreement and send it to you for signature, using DocuSign to obtain your signature, which is an online program that enables clients to sign electronically from the convenience of their computer or smart phone. After you sign the Sale Agreement, I will present your offer to the Seller’s Agent. The Seller will have the option to accept the offer as written, reject the offer, or make a counter offer, which means they’re accepting some terms and making adjustments to others.
It’s very important to remain flexible and patient throughout the negotiation process. Sometimes an offer is accepted quickly and without any changes. Sometimes, we will go back and forth with the Sellers multiple times. You and I will continue to discuss what is most important to you and how we can be flexible to help both parties ‘win’. My best advice during this stressful time is for you to relax, take a deep breath, and be patient. I promise to update you as soon as I have something new to report!