What Your Offer on a House Should Include
There’s nothing quite like the excitement of finding the next house you want to live in, but that feeling can quickly become overshadowed by the unknown if you aren’t fully prepared. Making an offer on a house isn’t necessarily complicated, but it does require you to make some important decisions as the buyer.
As a Realtor, I never want you to be uninformed. So, as I’m walking through putting an offer together with a client, here are the things that I make sure they include:
The Offer Price
First and foremost, the offer obviously needs to include the offer price. It’s important to hear to look at the list price, the neighborhood comps, and the type of market we are in (buyers or sellers) to know how much to offer. It’s also important to consider your personal budget and how badly you want the house.
Expiration Date
This answers the question, “how long is this offer good for?”. It gives sellers a set amount of time to make a decision to accept, counter, or reject your offer.
Money Matters (aka Financing)
Next, sellers also will want to know how you plan on paying for the house and want to make sure that you are actually able to pay what you way you can pay. This usually comes down to including a pre-approval letter from a lender in the offer. It’s also important to include the type of loan you will be using and how much money you are planning on putting down.
Earnest Money
Speaking of money, your offer should also include earnest money (typically 1% of the house). This is money that shows you are serious as a buyer. This money will eventually be used as part of the down payment if the offer is accepted and the process goes through.
Details About Closing Costs
Unfortunately, there are a lot of costs associated with closing, and these can be detailed in the offer. Do you plan to split 50/50 with the seller? Will you pay all of the closing costs? Do you want the seller to assume the costs? These are important decisions to make and include.
Closing Date
How fast are you hoping to be in your new home? Depending on the seller’s situation, both a short and a long timeframe could be appealing. Work with your Realtor to find out what is typical and combine that with your family’s needs to make this decision.
Contingencies
A contingency is defined as “a provision for an unforeseen event or circumstance.” So when it comes to buying a house, a contingency is something that will allow the agreement to be broken. Possible contingencies could be things like a home-sale contingency which would make it dependent on the sale of your current house, a financial contingency dependent on if you’re approved for a loan, or a home inspection contingency which would allow you to break the agreement if the needed repairs were too much. There are all different kinds of contingencies, so it’s important to think through all of the different scenarios and include what is most important to you.
Inspections and Warranties
Lastly, the offer can include details about the requirements of a home inspection and a section about warranties. As your Realtor, these are things I can help walk you through at the time of putting the offer together.
Next Steps
This list isn’t all-inclusive, but hopefully, it helps to give you a better idea of what to expect when it comes to making an offer on a house. Like every part of the process though, you don’t have to do it alone. I’d love to come alongside you and help. Reach out anytime at traceyrice@kw.com or 405-226-3770.