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Make The
Offer They Can't Refuse
Knowing what to offer is a big dilemma for home buyers. You want to
get the best deal possible, but you don't want to lose a good thing by
coming in too low. How do you handle this most important part of your
real estate transaction?
In a perfect world, the property you are interested in would be fairly
priced, you would accept that price and after signing papers and
exchanging keys, the deal would be done.
However, there are many components that make this a little more
complicated. You may have heard that you should offer a certain
percentage below the asking price. This may or may not be true. If you
are competing for the purchase of a home, the seller will probably get
full-price offers and sometimes even more. Likewise, if the demand is
weak, that will impact offers in the other direction.
The process of making offers varies and it is vitally important to
understand the specifics. What are the estimated transaction costs and
who will pay for what? Typical costs include the brokers' commission,
a home inspection, a termite inspection, escrow or attorney's fees, a
title search, an owner's title insurance policy, transfer taxes and
recording fees. The price tags on these items vary greatly around the
country. Who pays for what is a matter of both local custom and
negotiation.
Are you requesting a mortgage financing contingency and how specific
is it? The mortgage escape clause is a must, unless you plan to pay
all cash for the home. Without this contingency, you can be legally
obligated to purchase the home even if you can't obtain financing.
Further, an open-ended statement that says the buyer will obtain a
loan 'at the prevailing rate of interest' leaves you completely
exposed to interest rate fluctuations. It is preferable to include the
statement that says the loan must be at an interest rate 'not to
exceed xx percent' and on specified terms.
Do you have a clear idea of what furniture, fixtures and appliances,
if any, are being sold with the property? Technically, anything that's
permanently affixed to or installed in the home is real property.
Everything else is the seller's personal property. This distinction is
a narrow one and it naturally leads to a fair amount of confusion. Are
built-in appliances real property or personal property? What about a
shelving system? A chandelier? Window coverings? Sellers who intend to
remove anything that's attached to the home should have that spelled
out in the contract. And the same goes for buyers who expect to
acquire any of the furniture or other movables.
In a typical situation, you will complete an offer that your agent
will then present to the seller and the seller's agent. The owner, in
turn, may accept the offer, reject it or make a counter-offer. Because
counter-offers are common (any change in an offer is considered a
'counter-offer'), it's important for the buyer to remain in close
contact with the agent during the negotiation process so that any
proposed changes can be quickly reviewed.
Ask your real estate agent to go over the standard contract with you
before you make (or receive) a purchase offer. That way, you'll know
what to expect and be prepared to work with your agent to negotiate
the best deal you can get.
Copyright 2005 PropertySource Network |
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Jeannie Hamilton
ABR, CRS, e-PRO, GREEN, GRI, SRES
Broker/Owner
Hamilton Properties
1100 Deer Trail Road
Boulder, CO 80302-9437
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Office: |
303-443-9221 |
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Cell: |
303-817-9988 |
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Fax: |
888-449-3611 |
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Toll Free: |
800-443-9212 |
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Email: |
jeannie@jeannierealtor.com |
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Email
webmaster@jeannierealtor.com with
questions or comments about this website.
Copyright © 2012 Jeannie Hamilton, Inc
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Last Updated:
January 24, 2012
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