When someone has been searching for the best property to buy and he or she has finally discovered what they feel is the perfect home, the next natural step is to make an offer. When the time comes to make the offer, it's important for the buyers and sellers to know what components actually make up an excellent offer. Potential buyers must craft an offer that the sellers will most likely accept. It's very important fo those who are buying a home to know what they should offer, and the sellers of the home need to know what constitutes a good offer.
There are many different factors that come into play when drafting a real estate purchase and sale agreement, here are a few integral components:
With the price, there can be quite a conundrum. Buyers want the lowest possible price and sellers want the highest possible price. To make the deal work, the price needs to make both of the parties happy, but in a seller's market (as we are in right now), the sellers usually have the upper hand. This can naturally take quite a bit of negotiation if buyers are trying to negotiate the asking price. In our current market, if you're a buyer and find a home you love, it would serve you well to offer the seller their asking price (or close to it) and not ask for too many concessions (like closing costs).
This is the proof that the buyer has the intention to make good on the purchase of the property, and can be security for the sellers just in case a buyer decides to back out of the purchase without a valid reason. The sellers can receive the earnest money as compensation for the sale fail. When the deal goes through, the earnest money can go toward helping with the down payment, closing costs and other expenses. While this might not be essential, it can make a decent deal even more appealing for the seller, so make sure to make a reasonable earnest money deposit when you submit your offer to show that you are a serious buyer with intent to follow through with the purchase.
When buying, the buyer should be able to provide a preapproval letter that shows they are able to get financing for the property. Before you go house hunting, it's essential to meet with a mortgage lender to ensure you are able to go through with the purchase, and it is essential for the seller to see. Otherwise, they could choose not to accept your offer if you don't show proof you are qualified to buy the home. If the sale doesn’t happen because the preapproval process was dismissed, a buyer could be costing sellers valuable marketing time and could face monetary damages. Most experienced real estate professionals will ask potential buyers to become prequalified before they take them to view properties.
Inclusions and Exclusions
Buyers and sellers also need to determine what items are and are not included in the sale of the house. Will appliances or outbuildings be included with the property? Has the seller listed that a trampoline and playset are included in the purchase? Both parties need clearly agree as to what they are selling, and what each party is paying for where costs are concerned when making the deal. Again, many of these things are negotiable.
You should also know when the sale will take place, and the deal must have deadlines for meeting each of the steps of the transaction. There should be a move in date, an inspection date and deadlines for responding to requests, and a date that the offer on the table expires. This ensures that the buyer and the seller do have clear timelines for the other party to take action.
Of course, different types of sales may have different elements in them as well. Make sure you are working with a qualified real estate agent who will be able to help you make sense of creating or getting the best possible deal whether you are buying or selling. An experienced agent will help draft an offer that meets all of the criteria above and they will ensure that all timelines are adhered to.
Have questions? Please give one of our experienced agents a call. We're always happy to assist you with your real estate needs.