{"id":472,"date":"2011-10-06T12:05:27","date_gmt":"2011-10-06T12:05:27","guid":{"rendered":"http:\/\/www.anthonydidonato.net\/wordpress\/?p=472"},"modified":"2011-10-25T12:42:29","modified_gmt":"2011-10-25T12:42:29","slug":"offering-to-purchase-real-estate-the-basics","status":"publish","type":"post","link":"https:\/\/www.anthonydidonato.net\/wordpress\/offering-to-purchase-real-estate-the-basics\/","title":{"rendered":"Offering to Purchase Real Estate- the Basics"},"content":{"rendered":"

Writing an Offer to Purchase Real Estate<\/strong><\/p>\n

Once you find the home you want to buy, the next step is to write an offer \u2013 which is not as easy as it sounds. Your offer is the first step toward negotiating a sales contract with the seller. Since this is just the beginning of negotiations, you should put yourself in the seller\u2019s shoes and imagine his or her reaction to everything you include. Your goal is to get what you want, and imagining the seller\u2019s reactions will help you attain that goal.\u00a0 The offer is much more complicated than simply coming up with a price and saying, \u201cThis is what I\u2019ll pay.\u201d Because of the large dollar amounts involved, especially in today\u2019s litigious society, both you and the seller want to build in protections and contingencies to protect your investment and limit your risk.\u00a0 In an offer to purchase real estate, you include not only the price you are willing to pay, but other details of the purchase as well. This includes how you intend to finance the home, your down payment, who pays what closing costs, what inspections are performed, timetables, whether personal property is included in the purchase, terms of cancellation, any repairs you want performed, which professional services will be used, when you get physical possession of the property, and how to settle disputes should they occur.\u00a0 It is certainly more involved than buying a car. And more important.\u00a0 Buying a home is a major<\/em><\/strong> event for both the buyer and seller. It will affect your finances more than any other previous purchase or investment. The seller makes plans based on your offer that affect his finances, too. However, it is more important than just money. In the half-hour it takes to write an offer you are making decisions that affect how you live for the next several years, if not the rest of your life. The seller is going to review your offer carefully, because it also affects how he or she lives the rest of their life.\u00a0 That sounds dramatic. It sounds like a clich\u00e9. Every real estate book or article you read says the same thing.<\/p>\n

Contingencies in a Purchase Offer<\/strong><\/p>\n

In most purchase transactions there may be a slight challenge or two, but most things will go quite smoothly. However, you want to anticipate potential problems so that if something does go wrong, you can cancel the contract without penalty. These are called \u201ccontingencies\u201d and you must be sure to include them when you offer to buy a home.\u00a0 For example, some \u201cmove-up\u201d buyers often agree to purchase a home before selling their previous home. Even if the home is already sold, it is probably a \u201cpending sale\u201d and has not closed. Therefore, you should make closing your own sale a condition of your offer. If you do not include this as a contingency, you may find yourself making two mortgage payments instead of one.\u00a0 There are other common contingencies you should include in your offer. Since you probably need a mortgage to buy the home, a condition of your offer should be that you successfully obtain suitable financing. Another condition should be that the property appraises for at least what you agreed to pay for it. During the escrow period you are likely to require certain inspections, and another contingency should be that it pass those inspections.\u00a0 Basically, contingencies protect you in case you cannot perform or choose not to perform on a promise to buy a home. If you cancel a contract without having built-in conditions and contingencies, you could find yourself forfeiting your earnest money deposit.\u00a0 Or worse.<\/p>\n

Earnest Money Deposit<\/strong><\/p>\n

After you have come up with an offer price, the next step is to determine how large a deposit you want to make with your offer. You want the \u201cearnest money deposit\u201d to be large enough to show the seller you are serious, but not so large you are placing significant funds at risk.\u00a0 One recommendation is to make sure your deposit is less than two to three percent (depending on your location)\u00a0of your offered price. The reason for this is that if your deposit is larger than that, the lender will pay particular attention to how you came up with the funds. You might have to provide a copy of a canceled check along with a bank statement showing you had the money to begin with. Normally, this is not a problem, but if you have a short escrow period or are barely coming up with your down payment, it could pose an inconvenience.\u00a0 Another reason to limit your deposit is \u201cjust in case.\u201d Although significant problems are the exception and not the rule, they do occur. \u201cJust in case\u201d there is a nasty or prolonged dispute between you and the seller, the less money you have tied up in a deposit, the fewer funds you have placed at risk.\u00a0 As with practically everything in real estate, there are exceptions to this rule, too. During a hot market there may be multiple offers on the property that interests you. A large deposit may impress a seller enough so they will accept your offer instead of someone else\u2019s, even when your unknown competitor is offering the same price or slightly higher.\u00a0 Since large deposits do impress sellers, you may also find that by making a large deposit you can convince the seller to accept a lower offer. More money up front may save you money later.\u00a0 There are also times when closing can be delayed by weeks, through no fault of your own. Have back-up plans prepared for such a contingency.<\/p>\n

The Closing Date<\/strong><\/p>\n

It is absolutely essential that you include a closing date as part of your offer. This way both you and the seller can make plans for moving, and the seller can make plans for buying his or her next home. Though most transactions actually do close on the right date, do not be so inflexible that a delay creates insurmountable problems.\u00a0 For example, if you are renting and need to give the landlord notice that you are moving out, you may want to allow a little flexibility. Otherwise, if your purchase closes a few days late you could find yourself staying in a motel with your belongings packed in a moving van somewhere while you pay storage costs.\u00a0 There are also times when closing can be delayed by weeks, through no fault of your own. Have back-up plans prepared for such a contingency.<\/p>\n

Transfer of Possession<\/strong><\/p>\n

A transaction is considered \u201cclosed\u201d once the deeds have been recorded. Then you own the home. However, it is not always possible for you to occupy it immediately. This can happen for several reasons, but the most common is that the seller may be purchasing a home, too. Usually, it is scheduled to close simultaneously with your purchase of their home.\u00a0 It is sort of like being at a red light when it turns green. Although all the cars see the light change at the same time, the guy at the back of the line doesn\u2019t begin moving until all the cars ahead of him have started.\u00a0 As a result, it has become customary to allow the seller up to a maximum of three days to turn over actual possession and keys to the home. When transfer of possession actually occurs should be clearly laid out in your offer to prevent confusion later.<\/p>\n","protected":false},"excerpt":{"rendered":"

Writing an Offer to Purchase Real Estate Once you find the home you want to buy, the next step is to write an offer \u2013 which is not as easy as it sounds. Your offer is the first step toward negotiating a sales contract with the seller. Since this is just the beginning of negotiations, … <\/p>\n

Continue reading<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[5,4,9],"class_list":["post-472","post","type-post","status-publish","format-standard","hentry","category-real-estate-tips","tag-anthony-didonato","tag-real-estate","tag-tips","item-wrap"],"yoast_head":"\nOffering to Purchase Real Estate- the Basics - Real Estate Agent and Sales in PA - Anthony DiDonato Broomall, Media, Delaware County and surrounding areas in Pennsylvania<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.anthonydidonato.net\/wordpress\/offering-to-purchase-real-estate-the-basics\/\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"6 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/offering-to-purchase-real-estate-the-basics\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/offering-to-purchase-real-estate-the-basics\\\/\"},\"author\":{\"name\":\"admin\",\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/#\\\/schema\\\/person\\\/964792b6994e8cc4cbddc36ad4824908\"},\"headline\":\"Offering to Purchase Real Estate- the Basics\",\"datePublished\":\"2011-10-06T12:05:27+00:00\",\"dateModified\":\"2011-10-25T12:42:29+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/offering-to-purchase-real-estate-the-basics\\\/\"},\"wordCount\":1257,\"publisher\":{\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/#\\\/schema\\\/person\\\/964792b6994e8cc4cbddc36ad4824908\"},\"keywords\":[\"Anthony DiDonato\",\"Real Estate\",\"tips\"],\"articleSection\":[\"Real Estate Tips\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/offering-to-purchase-real-estate-the-basics\\\/\",\"url\":\"https:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/offering-to-purchase-real-estate-the-basics\\\/\",\"name\":\"Offering to Purchase Real Estate- the Basics - 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