WHAT MAKES A STRONG OFFER?

A contract is essential to a transaction. It binds both seller and buyer on the terms and conditions of a property. Therefore, when looking for a home or an investment property, you want to make sure your offer stands out the first time among other competitors. It will increase your chances of getting picked by the seller.

SALES PRICE:

The sales price is broke down into three sections: The down payment, which is the payable portion by the buyer during closing. Two, the amount they are financing, and three, the total sum from the down payment and finance. The sales price is this first impression to stir up interest in a seller and start bidding. Make sure you have an agent that will advise you within the market value of a property.

FULL WAIVER VS PARTIAL WAIVER:

Only if the buyer is financing does this apply. When selecting a full waiver, you are giving up the right to terminate regardless of how far the appraisal is below the sales price. If the appraisal is below the sales price, the lender could reduce the loan amount. Which means you would pay off the difference.

On a partial waiver, both parties agree on a limit the appraisal can be. If the appraisal is equal or greater, the buyer can not terminate. However, if the appraisal is lower, buy can choose their right to terminate. 

EARNEST MONEY & OPTION FEE:

Earnest money is a deposit the buyer makes toward the home. It ranges between 1-10% of the home sales price. When a buyer offers earnest money, this demonstrates seriousness to the seller of purchasing their home. Once the offer is executed, the buyer will have a deadline to wire the money to the escrow officer to be held and released on the closing date.

The option fee plays a different role in the contract, and it goes hand in hand with the option period. This fee hardly exceeds $500 and is calculated per day. Example: $50 per day for a 3 days option period equals $150 (option Fee). This allows the buyer time to arrange an inspection and the option to terminate the contract.

CLOSING DATE:

The closing date is when the sale is officially finalized, but it is just as important. Closing 30 to 45 days from executed date gives the lender plenty of time for the unexpected. Make sure closing dates are on Monday through Thursday to avoid costly mistakes. And use it wisely on a motivated seller who may want a quick closing date.

So there who go an offer should be clean and strong the first time. Make sure you know how to protect your money when making an offer, and always ask questions when you don't understand. 

Goodluck & Read Before You Sign