You’ve found THE house and you want to make an offer to purchase. Fantastic! I’m getting excited for you! In today’s market, we need to put in an offer asap; ideally within hours. Before I can submit an offer to purchase on a home, there are things we need to discuss and make note of.
I need to know:
Your Full, Legal Name: I’ll need the full, legal names of anyone who will be on the contract as well as their phone number and email address.
First Offer Price: What is your first offer for purchase? Let’s talk about the sale to list price in the neighborhood. This will give you an idea of whether you should expect to pay below asking price, asking price or above asking price based on today’s market.
Your Walk Away Price: It is unusual for your initial price to be accepted by the seller (unless you have offered full price with no terms). It is standard practice to expect negotiations to go back and forth- this is why it’s called “first offer.” In addition to deciding where you want to start, it is important to decide how much you are willing to pay for this property and what your walk away price is before emotions get involved and negotiations get heated.
Closing Date: Nashville closings typically take between 30-45 days from contract acceptance. You can sometimes ask for a shorter or longer timeframe, but I wouldn’t expect it. For instance, if you are paying all cash with no contingencies, closing could take place in less than 30 days. But if a mortgage is required, a minimum of 30 days is standard procedure.
Earnest Money: How much earnest money are you comfortable putting down on this property? Generally earnest money is due 5-7 business days after the seller has accepted your offer and you have agreed to terms. It is not unusual to expect to pay $1,000 or more in earnest money. This is a sign of good faith to the seller that in addition to your pre-approval letter, you are a serious buyer. Earnest money is part of your down payment and will count toward your loan requirement’s down payment amount.
Down Payment: I need to know how much you plan to put down. During pre-approval, your lender has advised you on a percentage based on your loan type.
Closing Cost Credits: Do you want to ask the seller for any credits that would go toward your closing cost fees? Remember down payment and closing cost are two different amounts.
Home Warranty: Do you want to ask the seller to provide a home warranty on the property? Do you plan to purchase a home warranty at your own expense?
Contingencies: Are there any other contingencies I need to be aware of before we submit an offer? Do you have a home to sell in order to be able to purchase this home?
Remember to read the TAR contract I sent you before we got started so that you are familiar with the language and sections we’ll fill out when it’s time to submit an offer.
Once we’ve talked through all of the above, I’ll write the contract an have you sign in a program called DotLoop. Then I’ll submit your offer to the seller’s agent. While negotiations sometimes go quickly, be prepared to wait 24-72 hours for a response from the seller to your offer. Each seller is different- they may be out of town, want to sleep on your offer, need to speak their own bank- and may need their own time to make a decision. Patience is now essential once the offer has been submitted. I will let you know AS SOON as I hear from the seller’s agent.
Our brokerage is up-to-date and on-the go, therefore, we are a paperless office. We use a system called DotLoop for all of our contracts and negotiations. Don’t panic, your signatures and the paperwork are truly legal and binding, just as they are legal and binding on a printed contract. The documents you read and sign online can be printed out, scanned in to your computer as PDFs and emailed. I will create a “loop” for your transaction and we will work within that loop to handle and sign our paperwork.
Click here to watch videos on how to use DotLoop
Lastly, some buyers want to know the procedure to handle the situation in which a contract is accepted but the inspection reveals huge problems. We’ll discuss a little later on how this situation is handled and the steps that we’ll take to properly cancel the contract.