Here is some information buyers find helpful early in the process about preparing to write an offer, negotiations, and getting from a ratified contract to the settlement table.
Before drafting a contract offer once you find a property of choice, we:
– Run comps and analyze the market
– Look up the listing agent sales history, trends and days on market (are they an over-pricer or do they sell properties in the first week for 100% of list price?)
– Educate you on how many contracts and consider your options
– Can help give you Vegas odds as far as different price points to offer (it’s your risk tolerance and your money – we educate you to help make the decision that’s right for you)
We need (4) things to submit an offer:
1) Signed Contract + various addenda
2) Pre-Approval Letter or Proof of Funds if cash
3) EMD check (text a picture)
4) BONUS 4th ITEM: “Love Letter to the Sellers”
*Sometimes we suggest you write a letter to the Sellers describing why you love the home and why they should choose you as the next owner. This process is emotional. Sometimes Sellers can be more flexible when they feel an attachment vs. just a piece of paper. If you find something in the house that you can connect with them about, that’s great (like photos of where they’ve traveled).
We will use a combination of addenda to write a contract specific to your needs:
– Residential Sales Contract
– Conventional Financing & Appraisal addendum
– Home Inspection + Radon Inspection addendum
– Post-Settlement Occupancy addendum (aka Seller Rent Back)
– Contingencies / Clauses (additional terms you may consider when offering on a home, i.e. purchasing a home in “AS IS” condition)
– Lead Based Paint Disclosure (only applicable to homes built in 1978 or before)
– Residential Property Disclosure (Favors the seller. “Buyer beware.” In VA, the Seller isn’t making any warranties on the property, hence we encourage our Buyers to get their own inspections.)
*For the Financing/Appraisal & Home/Radon Inspection addenda, we will advise what deadlines make sense based on the transaction. If you are competing, these deadlines will likely be shortened.
Details + Basics we need from Buyers when drafting the Residential Sales Contract:
– Full names (how you will take title + how it will appear in the county record)
– Sales Price + subsidy amount (if applicable)
– Type of financing + down payment (% or dollar amount)
– Preferred settlement date
– EMD amount + Title company
*Typically, the EMD check is 1-3% of sales price. The more you put down, the more serious your offer looks. Remember: this money could be forfeited if you cancel the contract outside the scope of a contingency though (that’s the trade off). FYI: we’ve never had this happen.
– We’ll help confirm which items convey (i.e. appliances, security system, window treatments, etc.)
Other Associated Costs (estimates):
– Home inspections are based on total sq ft and will likely be around $275 – $1000+, based on Square footage of the property (paid up front)
– $99 for radon test (radon is a gas found in soil, and generally a test is performed if there’s a basement)
– $400-$600+ for appraisal; cost can vary based on lender, size, and price of property (paid up front)
– $400-$600+ for 1 year of home warranty coverage (there are different levels, and coverage can be paid for by seller or buyer)
– $35-$150 for termite inspection (This can be paid for by seller or buyer and is negotiated in the contract. It can be collected at settlement. If there are any issues found, it is at the seller’s expense per the contract.)
*Closing costs (if you are securing a loan) generally run about 2% of sales price. If you cash buyer, closing costs are ballpark 1%.
In general, we will keep you informed of all your contingencies (or outs) along the way once you are under contract. We will also discuss the pros vs. cons and risks of different terms that can be offered to a seller.
Our core value is to have a great experience for our Clients, while meeting specific goals and achieving optimal results.