By Living Room Realty, January 23, 2024
Congratulations! You have successfully been preapproved and you are ready to jump into the home buying process. You are feeling elated, excited, and probably a little (or a lot) nervous. Perhaps you’ve found a house you want to write an offer on but you have no idea what you need to know. When you’re writing an offer, the process can feel fast and overwhelming. Before you get to that point, the wise thing to do is slow down, take a breath, and become knowledgeable about what goes into a home purchase contract. Knowing what’s about to happen should help alleviate some of the uncomfortable butterflies, while holding onto the joy of the home purchase!
Your Realtor should be helping guide you through every step of the process, so you are feeling prepared for what goes into your offer. Keep in mind that once you’ve reached mutual acceptance with the other party, nothing can be changed without the other party’s permission. If your agent isn’t laying it all out, ask lots of questions! You will not sound uneducated, you will sound like you’ve done your homework!
Here are 5 essential points to consider before submitting an offer:
- Offer Price: Have you had the chance to look at a market analysis your Realtor has provided so you know you are offering a comfortable and fair price? Have you considered the condition, location, and how long it has been on the market? Have you verified the square footage? A few things to check could include making sure that any remodeling has been done with permits, whether there are certain zoning or other restrictions, and when the last sale occurred. All of these could play a part in determining your offer price.
- Contingencies. Most home purchases are contingent upon inspections and appraisal. Make sure you understand some what-if scenarios related to the contingencies: what would happen if the house doesn’t appraise at the sale price? Make sure you fully understand the home inspection contingency, the cost, the timing, and what to expect.
- Financing. Have you thoroughly reviewed your closing costs, property taxes, and monthly payment? Ask your what-if questions, such as what happens if you change your mind and want to put a larger down payment on a house once you’re in contract? What does it mean if you have non-liquid or contingent sources of funds, like gifts or withdrawals from 401k?
- Terms. Pay close attention to all of the terms you are agreeing to. Have you asked if there are any exclusions like personal property? Do you know what condition the seller is expected to leave the house in? What exactly are the items that are staying with the house? Did you schedule a walkthrough before closing? If the seller is possessing the house after closing or there are tenants in place, you will want to pay special attention and make sure your agent walks you through the potential risks.
- Know your dates! Dates on real estate contracts are super important. If you don’t abide by the dates on the contract, you could be in breach, which would risk the sale and your earnest money.
We at Living Room Realty are dedicated to top level education and service to our clients. Reach out to me if you have any real estate related questions!
~Natalie Strom, Living Room Realty
