Woohoo! You have found a property you love and want to make an offer!! Before I can submit your offer, I need answers to a few questions so I have all the information I need to write up your offer. After reading the below questions, please complete my Making an Offer Google Form to send me your answers. If you would prefer not to complete the form, you can either text or email your answers to me. 

Full Legal Name(s)

I need the full legal name of anyone that will be listed on the contract. The legal name must match your drivers’ license as you will have to show your attorney your drivers’ license at closing. 

Email Addresses

Because I will be sending your offer documents to you to sign electronically, I need all parties’ email addresses. 

Initial Offer Price

Let me know your starting or initial offer price. We will discuss comparable properties, and I will offer you my opinion on what you should offer on the property. However, the ultimate decision on what to offer is up to you. 

Walk Away Price

In addition to your initial offer price, you need to decide what your walk away number is. Most of the time, the Seller will not accept your initial offer price and will counter. Before the negotiations get heated and emotional, decide what your walk away price will be. That number will not be shared with the Seller, but I think it is important to think about that number now. 

How Will You Pay for the Purchase

Will you be paying for the purchase in cash or would you be obtaining a mortgage?

If you are paying cash for the purchase, make sure I have a recent, updated proof of funds letter from the financial institution where you will be withdrawing the funds. For financing, make sure I have an updated pre-approval letter.

Sale Contingency

Is this purchase contingent on your selling another property? 

  • Is that property on the market? 
  • Is that property under contract and what is the expected closing date? 

If your purchase will be contingent on selling another property, be prepared to share the executed contract with the Seller of your purchase. Any personal or financial information will be redacted before submitting to the Seller.

Personal Property

What personal property of the Seller would you like to convey with the property? Items fixed or attached to the property are generally not considered personal property and will convey with the sale. Typical personal property items include kitchen appliances, washer and dryer and window treatments (blinds/shutters, curtains and curtain rods). Other personal property items may include TV mounts, video doorbells, security cameras, sheds and children’s playground equipment. Vacation homes and condos are oftentimes sold fully furnished. 

Closing Date

When would you like to close on the property? 

Typically, closings happen between 30 and 45 days. Purchases with a conventional loan can close in 30 days while FHA, VA and USDA loans can take 45-60 days to close. You should check with your lender to see when they can close on the purchase so we set real expectations with the Sellers. Cash purchases can close in as soon as 14 days. 

You can ask for a longer closing date (60-90 days) but remember, you are offering this closing date to the Sellers and it is not a guarantee they will accept that closing time frame. Also, the Seller may request a longer closing date because of their moving/home purchase plans. Go into the offer with a plan but understand that it could be countered.

Closings happen Monday through Friday and generally take place in the morning (9:00 – 11:00). Closings cannot happen on bank holidays or days when the attorney’s office or Register of Deeds office is closed. Unless arrangements are made prior to closing, you will not be able to get the keys to your new property until the Deed is recorded. Usually, closing will happen in the morning and the Deed will record in the afternoon (3:00 – 4:00). When planning your move, take these times into consideration. 

The actual closing time will not be scheduled until 3-7 days prior to closing and determined by the attorney’s availability. Closings take around an hour to complete as a buyer. If you are working, I would recommend taking the full day off. In addition to closing, you may need to visit utility companies or your HOA office. You may also want to have lunch to celebrate and start to move as soon as possible. 

Also decide if you will be attending closing in person. If you live out-of-town, you do have the option of closing my mail. Your attorney will send closing documents and instructions to you by email or overnight mail (UPS or FedEx). You will also need to have a notary and witness lined up to help you complete your closing paperwork. 

If, for some reason, you cannot sign your closing documents, you can assign a Power of Attorney to do that. Let your attorney and me know you need a POA as soon as possible. The POA document will have to be created if you do not already have one in place. If you are using a loan to purchase your property, your lender will also have to approve the POA.

Deed

How will you like your property deeded/titled? 

Earnest Money

How much earnest money are you comfortable offering on this property? My suggestion is 1% of the purchase price if the property is priced over $250,000. If the property is priced under $250,000, I would suggest $1,000 earnest money. To learn more about earnest money and what it entails, read “Understanding the Contract: Earnest Money”.

I also suggest your earnest money amount be under $7,500. Should there be an earnest money dispute and the amount is under $7,500, the dispute would be handled by the Magistrate’s Court. Should the earnest money be over $7,500 and there is a dispute, the dispute would have to be handled by Civil Court. Civil Court would be more expensive and take longer to resolve.

You also need to decide the due date of the earnest money. I suggest a week from when you submit your offer. Your earnest money will be held by your attorney. You need to allow enough time for you to overnight your earnest money check to your attorney.

HOA Transaction Fees

Who would you like to pay the HOA transaction fees? These fees include the cost of the Certificate of Assessment, any capital contributions, transfer fees or other fees. Unless you are in a multiple offer situation, I would recommend you ask the Seller to pay the HOA Transaction fees.

Closing Costs

Will you be asking the Sellers to cover any of your closing costs? 

Sellers have their closing costs and Buyers have closing costs associated with their side of the purchase. You can ask that the Sellers pay some of your closing costs on top of their closing costs. I would suggest asking the Seller to pay some of your closing costs only if you do not have funds to cover your down payment and closing costs. Also, loan programs have different limits on how much a Seller can contribute to your closing costs so check with your lender.

Financing Terms

  • Is your offer contingent on financing?
  • What is the term of your loan (30-years, 15-years or another amount)?
  • What is your down payment percentage? Typical down payment percentages are 3.5%, 5%, 10% or 20% though you can put down different percentages. 
  • When will you apply for your loan? I recommend applying for your loan within 3 business days of submitting your offer. 
  • Who is your lender?
  • What type of loan are you getting (FHA, VA, USDA, Conventional, other)?

Due Diligence Period

When would you like your due diligence period to end? 

The due diligence period is your time to do any inspections on the property. Prior to the end of the due diligence period, you would ask the Seller for any repairs and leave enough time to send the Seller the termination fee check should you want to terminate during the due diligence period. Learn more about due diligence from the buyers’ perspective. 

I recommend the due diligence period to end 12-15 business days after you submit your offer. This time frame can be countered by the Seller and you may want to consider a shorter due diligence period if you are in a multiple offer situation. 

Due Diligence Termination Fee

What amount of due diligence termination fee will you offer?

During the due diligence period, you can terminate the contract for any reason, but you must give the Seller the termination fee before the end of the due diligence period. The termination fee can vary based on the price point of the home, the length of the due diligence period and any other offers. Generally, I would offer between $500 and $2,000.

Appraisal

Is the offer contingent or not contingent on an appraisal? 

You can choose to have your offer contingent or not contingent on an appraisal if you are paying cash or financing the purchase. Your lender will require an appraisal if you are financing. If you are financing your offer and you decide to make your offer not contingent on an appraisal, you will have to make up the difference (bring more cash to closing) if the property should not appraise for the purchase price. 

Wood Infestation Inspection

Will your offer be contingent or not contingent on a wood infestation inspection (commonly called a CL-100 or termite report)? If you want your offer to be contingent on the CL-100, will the buyer or seller pay for the inspection and will the buyer or seller choose the inspector?

I recommend always getting a CL-100 inspection. In addition to termites, the inspector checks for moisture or any other wood destroying organisms. I also prefer the buyer pay for and order the inspection so you have control over who completes the inspection and when it is completed. 

If any issues show up from the CL-100 inspection, the Seller must remedy the problem and provide the buyer with a clean CL-100 report. If the Seller does not remedy the problem, the Buyer can choose to accept the property “as-is”, negotiate with the Seller on treatment or payment for the repairs or terminate the contract.

Home Warranty

Do you want to ask the Seller to pay for a one year home warranty on the property? As long as you are not in a multiple offer situation, I would recommend asking the Seller to pay for the home warranty. If you are in a multiple offer situation or the Seller does not want to pay for the home warranty, you can decide not to have a warranty on the property or purchase the warranty yourself. [link to another blog post about the home warranty]

Survey

Would you like to have a survey of the home you are purchasing (this only applies to single family homes)?

Home Inspection

Would you like to have a home inspection completed on the home? I highly recommend having a home inspection completed on every purchase during the due diligence period. 

Sample Contract

Looking over the contract prior to writing an offer is often helpful for buyers. Click here to review a sample contract. Should you decide to write an offer on a property, other documents will need to be signed, but the contract is the main document.  

Once you have had a chance to read through this article and discuss options with anyone else involved in the purchase, please complete my Making an Offer Google Form. You can also email or text me your answers. I will put together your offer and send it to you through DocuSign to sign electronically. Once your offer is signed, I will send it to the listing agent so they can present it to the Seller. The negotiations process can be completed quickly or take a few days to complete. I will keep you updated throughout negotiations.