Making an Offer
So you've found your dream home and now you're ready to buy it. Here's how to take those next steps that can make that home yours.
Extending an Offer
Purchasing a home is one of the few transactions that involves heavy negotiations. A real estate agent is a valuable resource to have on your side as you determine the appropriate initial offer to extend. During this portion of the process, you'll want to consider the following:
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To demonstrate the strong financial backing and genuineness of your offer, you'll want to have the prequalification* letter from your Loan Officer ready. Sellers obviously prefer an offer with financial security.
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Facilitate all your negotiations in writing. This will provide a record of deals and decisions made as well as help clarify any misunderstandings.
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To demonstrate the seriousness of your offer, you'll want to have money ready to use as an earnest money deposit. While the amount varies depending on your location, all of it will be placed into an escrow account until the purchase transaction is complete.
Pre-Closing
As you come to the closing stage, you've entered the final stretch. At this point, you'll want to be sure to you cover a few things:
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Go over the loan commitment with your Loan Officer and be sure you understand your loan's rate terms and the additionally established requirements and details.
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Obtain homeowners' insurance and, if required, flood insurance.
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Using your loan commitment and purchase agreement as guides, set a closing date and time.
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Verify with the closing agent or attorney that a property survey was ordered.
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Prepare to move.
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Do a final inspection of the home you are about to purchase.
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Confirm that you have met all the guidelines and conditions in the purchase agreement established by the seller.
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Bring the total you owe in closing costs, in the form of a certified or cashiers' check, to your closing appointment. Typically, personal checks and/or cash are not accepted.
The Purchase Agreement
A legally binding contract between the buyer and the seller of the property, the purchase agreement outlines all terms and features of the final transaction. This can include:
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The property address and legal description
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The sales price, the loan amount, the down payment and deposit
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The names of all parties involved, including the buyer, the seller, the buyer's agent, the seller's agent, the mortgage broker/banker and any attorneys
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Time limits that might apply to the transaction
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Any contingencies that must be addressed prior to the deal being complete and finalized (such as the sale of the buyer's present home, issues from the home inspection that might need to be repaired, etc...)
Because of special and unique features of every home transaction and the varying needs of each home buyer and home seller, purchase contracts are not exactly the same. A real estate agent, a title company or an attorney may assist in the negotiations and execution of a purchase contract; this is dependent on the state in which the transaction is being conducted.
*A prequalification is not an approval of credit, and does not signify that underwriting requirements have been met.