Feeds:
Posts
Comments

Archive for the ‘Uncategorized’ Category

What goes into an offer? The terms are more than just price even though price is obviously a big factor. Some of the things you also need to think about: contingencies, possession, & closing costs.

Contingencies

Generally, the fewer contingencies you include in an offer, the more likely the seller is to accept your offer all other things being equal (price!). The most standard and readily accepted contingencies are financing, appraisal & inspections. The financing contingency allows you to walk away from the purchase without penalty if your lender is unable to complete the transaction for whatever reason. An appraisal contingency is really only specifically necessary when paying cash (i.e. without a loan) because otherwise it is included in with your financing. The inspection contingency is going to be your first big hurdle to cross once your offer is accepted. This clause allows you to withdraw your offer without penalty if you find something wrong with the house that was not apparent when you originally looked at and decided on this home.

Available HUD home in Chattanooga

Available HUD home in Chattanooga

Other possible contingencies include selling a current home (although this is a hard one to get accepted these days) or even the approval of a spouse in cases where a couple is relocating and only one member of the family has seen the house. Just about anything can be a contingency: Sale contingent on buyer’s dog’s approval of the noise from the bathroom fan.

OK, so I made that last one up. But it could happen.

Possession

Possession dates can be another negotiating point. You may find that a seller needs some time to find or finish building their new home. In these cases, an offer with a longer closing/possession date might persuade a seller to accept a lower purchase price. Maybe they are on the verge of foreclosure or they’ve been transferred to another city starting next week. If you can close quickly you might get a great deal.

Closing costs

Soon to be available Chattanooga Home

Soon to be available Chattanooga Home

Unless you are the one with all that cash in your freezer, you also need to think about closing costs. Even if you have the cash to pay them, your financing may work out better if you ask the seller to pay for your closing costs. Even if you have to increase the purchase price accordingly and use the cash you have to raise the percentage of your down payment relative to the price of the house. That’s geek speak for ‘ask me (me being me, Julia) if you’d be better off conserving your cash for your down payment.’

We’ll talk about price during the exciting conclusion of Making an offer.

Contact me for more information about the homes pictured in this post or for any other questions you may have.

Contact me for more information about anything you see on this blog.

Visit my website to search for homes.

Subscribe to my blog to stay updated on Chattanooga homes for sale, real estate news and community interest.

Read Full Post »