Step 7: Make an Offer on a Home You Love

You’ve found the perfect backyard and want to put in an offer.

Fabulous!

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 a few things you need to know:

Full legal name:   Please email us 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?  Let’s have a discussion about the sale to list price in the neighborhood. It will tell you a lot about whether you should expect to pay below asking price, asking price, or above asking price based on today’s market.

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, we need you to decide now how much you’re willing to pay for this property and what your walk away price is before thing get heated and emotional.

Closing date:  Typically in Indiana, closing takes place 30 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 June.

If you’re paying 100% cash you can often close faster than 30 days (around 21 days), but 30 days is usually the required minimum if you’re using a mortgage to buy the property. If you are down payment assistance, we’ll likely 45 days as there are typically more details to address.

Earnest money:  How much earnest money are you comfortable putting down on this property? Typically, contracts in Indiana ask for 1% of the purchase price as earnest money.  This earnest money is due in two days.    The earnest money is part of your down payment.  For example: if you’re planning to put $40,000 for a down payment and you’re paying $15,000 in earnest money, at closing you would owe an additional $25,000 for the remainder of the down payment.

Down payment:  For the contract, we need to know how much you’re going to put down for your down payment.

Closing cost credits:  Do you want to ask for any credits for closing costs? It 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?

Lastly, buyers sometimes want to know what happens if the contract is accepted and they have a change of heart or the inspection reveals a huge problem.  If the inspection reveals a huge problem (aka Defects) I can help you navigate through that for a reasonable outcome (lines 214 through 223 of the Purchase Agreement for an explanation of Defects and how to handle them).  If it’s a change of heart you must consult a Real Estate Attorney for advice.

Want to review the contract in advance? Review the Indiana Purchase Agreement

 

Posted on November 20, 2018 at 5:29 pm
Lee Ann Balta | Category: Buyer Step by Step

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