Now that you’ve found the right home, it’s time to put together an offer to purchase the home. The purchase offer contains all of the terms of the sale. Some of the decisions you will make when you are making the offer include:
- Purchase Price
- Amount of Good Faith Deposit
- Financing Terms
- When the Purchase will Close
- What Contingency Periods to Include
- Allocation of Costs
- Additional Items Included in Sale
How much should I offer?
Deciding on a price to offer involves a few steps. How long has the home been on the market? What have comparable homes in the area been selling for? Is there more than one offer on this home? We will show you all comparable sales in the area and give you all necessary information and guidance for you to make a good decision.
What are contingencies?
Contingencies are your protection in the purchase contract. There can be numerous different contingencies in the contract, requiring that the property meet certain guidelines, before you go through with the sale. Some common contingencies include:
For a time specified in the purchase offer, you may cancel the agreement if you are unable to secure the loan specified in the purchase offer. Many sellers are requesting or requiring that a buyer be pre-approved for a loan and may not accept a contract that includes a loan contingency.
The lender will typically order an appraisal to insure that the purchase price you offer is reasonable based upon comparable homes in the area. This protects their interest in the property. If the property fails to appraise for the price offered, the lender may refuse to do the loan, or may require additional down payment funds or may offer you less favorable terms.
Physical Inspection Contingency
For a time specified in the contract, you have the opportunity to do any inspections on the property that you consider necessary to confirm the value of the property. Based on the results of those inspections, you may request that the seller perform repairs. The seller is not required to perform any repairs not specifically designated in the purchase contract, but if they refuse your request for repairs, you will have the right to withdraw from the contract without penalty. The only costs at that point would be any inspections you have had performed, and for the appraisal, if that has been completed.