Making an Offer
Once you’ve found the home you wish to purchase, I’ll guide you through making an offer based on property and market conditions. I’ll prepare the purchase contract and advise you of protective contingencies, home inspections, appraisal and financing, warranties, title and escrow arrangements — all of which will be detailed in the offer.
The following items are required:
- Lender Pre-Qualification: If you’re planning to finance any part of the purchase with a new loan, you’ll need to provide a lender pre-qualification;
- Proof of Funds: If you’re making an all-cash purchase (no loan or mortgage), you’ll need a bank or brokerage account statement(s) showing available funds to cover the full purchase price and closing costs, or a source of funds letter provided by your bank or financial institution;
- Contingency Contract: If you purchase is contingent on the sale of another property, a copy of your fully executed purchase contract and all addenda is also required.
- Earnest Money: If your offer is accepted, you’ll need to deposit “Earnest money” to open escrow. A personal check or wire transfer (usually at least 1% of the purchase amount is customary) is due the first business day following acceptance;
Green Valley is a competitive market, so I recommend you have all the necessary documents handy prior to making an offer so there are no delays once you find your new home!
Contingencies are conditions included in the purchase offer that allow the Buyer to cancel the purchase without losing their earnest money. The standard contingencies included in your offer are the inspection contingency; the finance contingency (if you’re obtaining a new mortgage), and the appraisal contingency (included as part of the finance contingency).
In a competitive situation, homebuyers may be tempted to waive common contingencies in order to beat out other offers. This can be financially risky, however, so it’s essential that you consider the potential cost of waiving any contingency when making an offer.
Negotiation and Contract Acceptance
Once you submit an offer, the seller will have the option of accepting, rejecting or responding with a counter offer. Unless you’re offering full asking price and paying cash, expect that your offer may not be accepted without some negotiation. This is another reason why you should have your own Buyer’s Agent negotiating with only your interests in mind.
Depending on the strength of your offer, the seller may send back a counter offer, which you will be able to accept, reject, or respond with another counter offer. Once both parties agree to terms, the offer becomes a binding contract, and escrow is opened.
Deciding How Much to Offer
There are many factors to consider when deciding how much to offer on a home.
All About Contingencies
Contingencies are conditions included in the purchase offer that allow the Buyer to cancel the contract without losing earnest money or paying a penalty.
Escrow: Your offer is Accepted
Escrow begins once the offer is agreed upon and signed by all parties, and earnest money is deposited.