Your Purchase Price Offer
A formal contract is drafted in the same way as an offer letter. If an offer is accepted in certain jurisdictions, the document instantly becomes the purchase contract. While your real estate buyers agent Sydney will be adept at preparing the offer letter, make sure you understand the conditions of the deal before signing.
With your offer, you may be asked to contribute earnest money, often known as hand money. (It’s just enough of your down payment to show the lender that you’re serious.) This is pretty common. You will lose the hand money if the seller accepts your offer and you decide to back out.
Because the offer letter is frequently used as a contract, it will contain a long list of requirements and caveats that must be followed by both the buyers agent Sydney and the seller. Some of the things that will be included in your buyers agent Sydney offer are as follows:
- The amount of earnest money you’re putting down and the price you’re offering
- Home inspection stipulations: Because the inspection may take place after the offer is accepted, you must state that the whole transaction is contingent on receiving an acceptable inspection report. If a well and septic system are used instead of municipal water and sewer, these systems should be evaluated as well.
- Financial contingencies: You may also provide a contingency for getting the loan you seek (i.e., maximum interest rates, expected terms, etc.)
- The following items are included in the purchase: This list may include large appliances (usually the refrigerator), lighting fixtures, bushes, and just about anything else that isn’t held down, as well as those that are!
- Title contingencies: Your lawyer will perform a title search to make sure the property is free of legal claims (such as liens) and that the seller has clear title.
- Timeline: A response deadline specifies when the offer should be considered refused. Even if an offer reaches the asking price, the seller is not obligated to accept it in the majority of states. The seller isn’t even obligated to provide a reason why an offer was turned down. In most cases, though, you should get a response within a day or two. The vendor will advise you if your offer was too low. Then there’s the age-old art of negotiating.
How to Come to an Agreement on a Purchase Price
Unless you live in a hot market, a seller would seldom accept a first offer from a buyers agent Sydney at face value. Almost often, you may expect a counter-offer and at least one round of negotiations. The stumbling block might be purely economical, or you could want the porch swing, washer, and dryer included in the deal. Expect some haggling in any scenario.
During the bargaining phase, it’s vital that you and your buyers agent Sydney stick to the requirements of your mortgage pre-approval letter. It’s easy to fall in love with a house being sold by a buyers agent Sydney, especially if you’ve been looking for a long time or are under pressure to move out of your current home. Allow your emotions and heart to lead you away from potentially risky financial choices. You may suffer foreclosure, bankruptcy, or worse if you fall behind on your mortgage payments. You must walk away and wait for another opportunity if the merchant does not accept your best offer.
Your buyers agent Sydney and the seller will reach an agreement on a fair price for the home with some work and luck. The offer letter may serve as the contract, or you may be needed to write and sign a separate agreement, depending on the state’s real estate standards. You will make an earnest money deposit as soon as possible if you have not already done so. You may cancel the purchase even after signing the contract, but the deposit will be forfeited.
Following the completion of the purchase contract, both you and the seller are responsible for fulfilling the contract’s contingencies, starting with the home inspection. We’ll go over this in further detail on the following page.
Examination of the House
A qualified and thorough home inspection is critical as a buyers agent when acquiring a house. The inspection, which typically costs between $200 and $500, is your responsibility as the buyer. Do not, however, be put off by the cost. You might be buying the most costly lemon of your life if you don’t do your homework. Even in a brand-new house, hidden defects may exist that may only be detected by a trained inspection.
A certified inspector may be recommended by your real estate buyers agent Sydney. If not, look for an American Society of Home Inspectors member. An additional inspection will be necessary if you are seeking for an FHA or VA loan. (However, don’t depend just on that assessment; it may not be as thorough as a complete inspection.)
Your purchase offer should be contingent on the results of the professional examination. If the inspection shows a major termite infestation or foundation difficulties, you have the option of terminating the contract or having the seller correct the problem to your satisfaction.
The inspector will focus his attention on the following areas:
- Foundation: If there is a basement or crawl area, are there signs of water damage? Are there any cracks in the walls or on the floor that might indicate a structural problem?
- Construction: Is the house well-built? Is the flashing installed properly to protect the wood, is the wood deteriorating, and is the roof in good shape or will it need to be replaced soon?
- Plumbing: Was the plumbing installed correctly? Is it in good working order? Is there any evidence that there were any leaks?
- Heating and cooling systems: Is the machinery in good working order? Is it likely that they will need to be replaced in the near future? Are they rated for the space they’re supposed to heat?
- Electrical: Do you observe any electrical problems or code violations?
- Interior: Do the flooring seem to be exactly level? Are your windows and doors in good working order? Is everything in the kitchen in excellent functioning order? Is there any indication of leaks or mildew in the bathrooms?
The inspector will provide you a printed report that includes everything that was determined to be acceptable as well as the (hopefully) few issues that were not. If you need to update the purchase contract to add repair clauses, this report will come in handy. If the inspection report comes back clean, it’s time to get ready for the big day: closing.