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First Time Home Buyer
Refinance Your Mortgage
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It's Time to Make an Offer on Your First Home
Your first offer on a home is not necessarily the final offer. Remember that you are most likely to enter into some sort of negotiations. This is where it is crucial to have a Real Estate Agent working on your behalf. You will most likely be asked to make an earnest money deposit as a sign of good faith to the seller.
Your first offer on a home is not necessarily the final offer. Remember that you are most likely to enter into some sort of negotiations. This is where it is crucial to have a Real Estate Agent working on your behalf. You will most likely be asked to make an earnest money deposit as a sign of good faith to the seller.
What's Considered To Be A Reasonable Offer?
If this is your first home, you probably don't know where to start in terms of making an offer. Most sellers price their home a little higher because they know there will be some sort of bargaining involved. Generally, 5% below the asking price is a good place to start but we recommend that you consult with your Real Estate Agent to determine what the best price to offer is. Your agent will have more information about the home you are writing an offer on and the surrounding homes.
If this is your first home, you probably don't know where to start in terms of making an offer. Most sellers price their home a little higher because they know there will be some sort of bargaining involved. Generally, 5% below the asking price is a good place to start but we recommend that you consult with your Real Estate Agent to determine what the best price to offer is. Your agent will have more information about the home you are writing an offer on and the surrounding homes.
What is a Contingency?
A contingency is nothing more than saying you will buy the home as long as other things are done. Contingencies are often written into the purchase agreement and can include things like:
A contingency is nothing more than saying you will buy the home as long as other things are done. Contingencies are often written into the purchase agreement and can include things like:
- Repairs to the property are completed and inspected
- The appraisal is satisfactory and supports the value you are paying for the home.
- The title is satisfactory and there are no problems with taking over the home.
Your Offer and Counter Offers
When you submit your offer you will want to include an expiration date. A typical time period is 48 hours but can differ depending on your particular situation. You will also want to set a target closing date. The closing date is typically set for 4 to 8 weeks from the time you sign the purchase agreement. This should be enough time to meet all contingencies and secure your financing.
Once you sign your offer and submit it to the sellers they have the right to review it at their leisure, but must respond within the time limit that has been set. If you receive no response, then it's safe to assume the offer has been rejected. From here you can either move onto a different home or write a better offer.
Another possibility is that the seller will make a counteroffer. This counteroffer does not have to be the final offer. If you are not happy with this offer you can make another counteroffer (but it may be wise to split the difference or you may end up losing the house and the deal).
When you are making your initial offer it is important that you consider asking for seller concessions to help pay for closing costs associated with your loan. These costs may include title fees, attorney fees, discount points, origination fees, appraisal fees, processing and underwriting fees, inspection fees, and others. A seller will often consider paying these concessions in order to sell their home. Some programs allow the seller to pay up to 6% of the purchase price toward these concessions.
When you submit your offer you will want to include an expiration date. A typical time period is 48 hours but can differ depending on your particular situation. You will also want to set a target closing date. The closing date is typically set for 4 to 8 weeks from the time you sign the purchase agreement. This should be enough time to meet all contingencies and secure your financing.
Once you sign your offer and submit it to the sellers they have the right to review it at their leisure, but must respond within the time limit that has been set. If you receive no response, then it's safe to assume the offer has been rejected. From here you can either move onto a different home or write a better offer.
Another possibility is that the seller will make a counteroffer. This counteroffer does not have to be the final offer. If you are not happy with this offer you can make another counteroffer (but it may be wise to split the difference or you may end up losing the house and the deal).
When you are making your initial offer it is important that you consider asking for seller concessions to help pay for closing costs associated with your loan. These costs may include title fees, attorney fees, discount points, origination fees, appraisal fees, processing and underwriting fees, inspection fees, and others. A seller will often consider paying these concessions in order to sell their home. Some programs allow the seller to pay up to 6% of the purchase price toward these concessions.
What is Earnest Money and Why Should I Provide It?
Earnest money is a way to show good faith and the fact that you are serious about buying the home. The money goes into an escrow account held by a neutral third party which is typically your Real Estate Agent's Company. Don't worry that money isn't paid to the seller just for making an offer, although it is possible to lose that money to the seller if you decide to back out of the purchase agreement for reasons other then what is listed in the contingencies.
Once you and the seller have come to an agreement you will both sign the final purchase agreement and enter into a binding contract. Whenever you sign anything be sure that you read everything and ask any questions that you may have. When it comes to something like this there are no stupid questions. If you are confused about anything, don't hesitate to ask your Real Estate Agent before you sign.
Earnest money is a way to show good faith and the fact that you are serious about buying the home. The money goes into an escrow account held by a neutral third party which is typically your Real Estate Agent's Company. Don't worry that money isn't paid to the seller just for making an offer, although it is possible to lose that money to the seller if you decide to back out of the purchase agreement for reasons other then what is listed in the contingencies.
Once you and the seller have come to an agreement you will both sign the final purchase agreement and enter into a binding contract. Whenever you sign anything be sure that you read everything and ask any questions that you may have. When it comes to something like this there are no stupid questions. If you are confused about anything, don't hesitate to ask your Real Estate Agent before you sign.
Should You Get a Home Inspection
Even though it's not required, it is recommended that every home buyer should have a home inspection performed to make sure there are no problems with the structure, condition, and utilities. The inspector examines everything about the home from the foundation up to the roof and everything in between including the plumbing, heating and air conditioning units, electrical systems, sewer or septic tanks, etc.
Home inspections are an extra expense but for many first time home buyers it's the safest way to move into a home and feel safe with what you bought.
Even though it's not required, it is recommended that every home buyer should have a home inspection performed to make sure there are no problems with the structure, condition, and utilities. The inspector examines everything about the home from the foundation up to the roof and everything in between including the plumbing, heating and air conditioning units, electrical systems, sewer or septic tanks, etc.
Home inspections are an extra expense but for many first time home buyers it's the safest way to move into a home and feel safe with what you bought.
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