Fabulous! You’ve found the perfect home and want to put in an offer. In today’s market we need to put your offer in asap; ideally within a few hours. Before we can put an offer in on a home, there are things we will need:
Full legal name: The full legal name of anyone who will be on the contract as well as their phone number and email address.
Offer price: What price do you want to offer for the home? We will have a discussion about the listing and the comps in the area to determine a fair offer for the home.
Your walk away price: Don’t expect to pay your initial offer price as it’s rare for a seller to accept your initial offer without some negotiating back and forth. That’s why it’s called an initial offer. In addition to deciding what offer you want to put in to start, you need to decide now how much you’re willing to pay for this property and what your walk away price is before negotiations get started.
Closing date: Typically, closing takes place 45-60 days from contract acceptance. Sometimes you can ask for a longer closing date depending on the seller’s needs, but we wouldn’t expect it. Therefore, if you want to move around July 1, plan on putting in offers at the beginning of May. If you’re paying 100% cash you can often close faster than 30 days, but 45 days is usually the required minimum if you are getting a mortgage.
Earnest money: How much earnest money are you comfortable putting down on this property? Typically, this will be $1000 – $2500 depending on the property. This is due once the contract is signed by both parties, but we will send a copy of the check with the offer to purchase to show good faith to the seller. The earnest money is part of your down payment. Therefore, if you’re planning to put $10,000 down for a down payment and you’re paying $2,000 in earnest money then at closing you would owe an additional $8,000 for the remainder of the down payment.
Option money: Option money is paid directly to the seller, and “buys” you a specific number of days to thoroughly check out a property and have a home inspection done before you become contractually obligated to proceed with the purchase. If you have a change of heart or discover a huge problem with the home, you may cancel the contract during the option period. The number of days can vary from 5-10, but the customary amount is $10/day for every day of the option.
Down payment: For the contract, I need to know how much you’re going to put down for your down payment. Your lender will be able to help provide this information.
Closing cost credits: Do you want to ask for any credits for closing costs which would go towards the amount of closing cost fees you have to pay for on top of your down payment?
Home warranty: Do you want to ask the seller to provide a home warranty on the property?
Contingencies: Any other contingencies we need to be aware of? Do you need to sell your current home before we can buy this home?
Once we’ve talked through the above and we have reached an agreement, we can either meet in person or I will forward you the contract and have you sign it via a program called DocuSign. We’ll then submit it to the seller’s agent. While negotiations sometimes go quickly, be prepared that it could take 24 – 72 hours to negotiate the purchase price if the seller is out of town, wants to sleep on the offer for a night, if we’re dealing with a bank, etc. Every seller is different and some people can make decisions quickly whereas others need time to think things through.
Patience is now the name of the game once an offer has been submitted!