Buying a home is an exciting and sometimes scary process. Once you’ve found that perfect place that you want to call “home”, you want to make sure that the offer you make to the seller gives you the very best chance of securing your new home. It is import to ensure that the sale is properly documented and protects your interests. An offer to purchase can include all sorts of provisions, but the most common include purchase price, deposits and dates they are due, finance information, inclusions, contingencies, concessions and closing date.
Proposed Purchase Price
This is the amount you wish to offer to buy the property. When determining a price to offer, it is important to keep in mind current market values (whether you are purchasing in a buyers’ or sellers’ market) and the comparison sales – the price similar properties have sold for in the last six months in the surrounding area. Your offer will most probably differ from the seller’s asking price, unless there are multiple offers on this home. In that case, you might want to discuss your strategy with your Realtor who has experience of these situations and can guide you through. It’s generally best to decide ahead how much you’re prepared to move on your original offer if the seller comes back with a counter offer and also how much is the most you are willing to pay for the house.
In New Jersey, there are generally two deposits made, the good faith offer which is the amount of money which accompanies your offer. The second deposit, which is generally higher than the good faith offer, and demonstrates your intent to buy the property. In New Jersey, this is usually submitted after Attorney Review. At closing, these deposits will be applied towards the purchase of the house.
There are many forms of financing. The most common ones are some sort of mortgage or cash. If you are going to apply for a mortgage to purchase your new home, you will need to have secured a Letter of Pre-Approval from a mortgage provider. Your contract of purchase will also show a date by which the mortgage must be secured. If you are going to make a cash purchase, you will need to prove you have the money available with some sort of “Proof of Funds.”
Fixtures such as ovens, dishwashers, light fixtures are generally included in the sale of the home (unless the seller has expressly excluded them on the listing.) But if you are interested in something that is the seller’s personal property, for example maybe patio furniture, it can be listed on the contract and then negotiated in the sale of the home.
In your offer to purchase, you can include any contingencies or conditions that need to be satisfied before the sale can take place. The most common contingencies, which are included in a real estate contract, are attorney review, home inspection, financing and title searches.
You can also make the offer contingent on you selling your existing home, but remember this generally weakens your position and makes your offer less attractive to the seller.
If you are in a strong position to negotiate, for example the home inspector has found some issues with the house that need repairing, you might wish to ask for some concessions. These are generally some sort of credit to pay for the necessary repairs.
This is the date that legal possession of the property transfers to you and the funds to purchase the property are paid to the seller. This is the date you can generally move into your new home and keys, etc, will be handed over to you at the closing.
It is important that your offer to purchase is drawn up carefully. That is why in New Jersey, Realtors are required to disclose how they intend to work with a buyer and seller (agency) and recommend that buyers and sellers engage an Attorney as Real Estate Agents cannot give legal advice.
If you would like more information about buying or selling a home, please contact me on my direct line at (732) 261-6151. I’d be glad to help you.
If you know someone else who would find this information helpful, please pass it on to friends and family!
If you’re considering buying or selling soon, or know someone who is, it’s important to have a knowledgable, local agent who can guide you through the process. I am always available to help.
This blog is the courtesy of Jackie Safran who is an award winning Real Estate Agent at RE/MAX Properties Unlimited in Westfield, NJ (732) 261-6151. I help nice people sell and buy beautiful homes in Union and Middlesex Counties.