Looking to Buy a Home?
You’ve spent a lot of time going to open houses and surfing the net looking over homes that you want to buy and you have finally found “the one.” So what happens now? Well, it’s time to make an Offer to Purchase. When it comes to buying a home, there is a process that must be followed in order to ensure that everything goes smoothly and making an Offer to Purchase is a big part of the process.
The Offer to Purchase is a legal document that stipulates that you agree to buy the seller’s home and is usually contingent on certain conditions that must be met. The process is quite straightforward, depending on the type of Offer to Purchase that you make: Firm: This Offer to Purchase is one that seller’s prefer, as it indicates that you are ready to purchase the home without laying down any conditions. If the dollar amount is accepted, the home is yours.
Conditional: This Offer to Purchase means that you have placed some conditions on the offer that may include a home inspection, sale of your own home, or getting financing. Conditional offers are used most often.
So what should an Offer to Purchase document include? Parts of an Offer to Purchase #1 Price Deciding on the price is not always easy, as you don’t want to low-ball and chance losing the home, or overbid and feel like you overpaid. Do your homework; check out what similar homes in the area have already sold for, assess the condition of the home and consider the possible competition you face from other potential home buyers.
Parts of an Offer to Purchase #2 Deposit Typically, a 5% deposit is required as “good faith” and is applied against the purchase of the home once the sale is finalized.
Parts of an Offer to Purchase #3 Inclusions and exclusions Inclusions and exclusions, or chattels, may include anything from kitchen appliances to window coverings. You need to specify what is staying and what is going. Keep in mind that anything that is nailed down is usually considered part of the home (e.g. light fixtures).
Parts of an Offer to Purchase #4 Conditions Conditions are items that you list in the Offer to Purchase that point out the things that must be completed before the closing date. Conditions usually include home inspections, minor repairs, and selling your own home).
Parts of an Offer to Purchase #5 Terms Typically, terms include the price you are offering on the home and the means by which you plan on paying. You can either arrange your own financing through your financial institution or a mortgage broker, or take on the seller’s mortgage.
Parts of an Offer to Purchase #6 Closing day Once negotiations are finalized, you and your real estate lawyer will review the offer to ensure that the terms meet your criteria before signing.