Looking at homes and visiting new neighborhoods is an exciting experience. Once you’ve found the perfect home, your next step would be to put in an offer.
In a hot market, your offer needs to stand out. This means it should be crafted in a way that clearly communicates your intentions to the seller and increases your chances of closing on the property.
What’s in an offer?
Also referred to as a letter of intent to purchase or a purchase agreement, the purchase offer is a legal document wherein you state that you’ll buy the home for a specific price – on the presumption that certain terms and conditions will be met.
A form contract is typically available for your Realtor to fill out. This will include details such as:
- Deposit amount
- Mortgage terms
- Closing date
- Inclusions and exclusions
- Inspection contingency
The offer must state the price you’re willing and able to pay for the home. This amount can be influenced by a number of factors, including:
- How much home you can afford
- The number of buyers who have expressed interest in the home
- The seller’s motivations for putting the house in the market
- The price of comparable properties in the area
- Repairs that need to be made to the home
- How badly you want the home
Low-ball offers are generally discouraged, especially if there are other buyers putting in offers. You might end up losing the home to one of them, and worse, it might offend the seller, dissuading them from negotiating with you.
The purchase offer becomes legally binding once the seller accepts it, and provisions for nullification vary by state. In New Jersey, there’s a three-day attorney review period during which you may back out of the contract for any reason.
If your attorney can inform the seller’s attorney in writing that she disapproves of the contract and gives clear reasons for it, then she can extend the period past three days, until such a time that the disputed items are agreed upon, or up to the point where you may cancel the contract.
In reverse, both attorneys can also agree to shorten the three-day waiting period if you and the seller reach an agreement before then.
How to craft a good offer
There is a common misconception that offers are all about the price. Yes, price is a critical factor, but there are various working parts that make up a solid offer.
Things you want to consider:
- Do you have a pre-approval?
- How much are you offering as a down payment?
- Are you currently renting or do you have to sell your home in order to purchase a new home?
- Is your mortgage from a credible bank or lender?
- Did you happen to meet the seller/homeowner, if so, did you make a memorable connection?
Sometimes including a personalized letter will help set your offer apart from others.
A major factor will be whether or not you have a good agent. You will want to ensure that you have a knowledgeable, personable, savvy and persistent agent who will not only craft and present your offer in the best possible light, but will follow up with the seller’s agent and keep you in the loop.
Buying a home in North Jersey? Call the Mischel Group at (201) 851-1781 or send an email to firstname.lastname@example.org.