When making an offer on a property, there are numerous things to consider that will impact a seller’s decision to potentially accept your offer or not. Seller’s motivation, type of property, market conditions, and other factors can make each of these more or less desirable to a seller. Every situation is different and each of these items have nuances that are necessary to discuss when attempting to buy a home. This is why working with a professional is so important. All of these can be leveraged in different ways to get your offer accepted.
Purchase Price – The price you are offering to pay for the house
Earnest Money – This is a good faith initial deposit. I recommend an amount of 1% to 2% of purchase price. These funds must be provided to seller’s broker within 2 business days of accepted offer. This is part of the down payment at closing and you could lose this money should you back out of the contract for an invalid reason later in the process.
Closing Date – The date you take ownership of the house. Usually 30 – 60 days from offer date.
Financing – What type of financing and % down payment. A strong preapproval letter from a reputable lender can make an offer stand out.
Closing Costs –While total costs vary based on price of property and loan program, a good rule of thumb is 3% of the purchase price. In the offer, you can request that seller pays some or all of the closing costs. To the seller, this reduces the net offer and is often seen as a weaker offer.
Inspection – You select how many calendar days desired to have an inspection done and negotiate repairs if needed. 7-10 days is common. In competitive markets, buyers are sometimes not making offers contingent on an inspection. Talk about this in detail with your real estate advisor.
Other Details – There are numerous other details regarding the offer, which we will talk through at the time of signing. The above items are the most critical and include the major details the seller wants to know.