In my last post I spoke about the first three components of a purchase offer. Those parts were: Terms, Inclusions/Exclusions, and the Deposit.
This post I'll talk about the last three main parts of the Purchase Offer. The next component of the purchase offer is any contingencies that must be satisfied prior to the closing taking place.
Contingencies:
Mortgage Contingency: A condition in the contract that protects the buyer in the case where they cannot obtain a mortgage from a lender or that loan isn't within the terms that they spelled out in the contract (i.e. interest rate.)
Sale and Transfer Contingency: This is used when a buyer hasn't sold their home yet and makes the sale of that residence a condition that must be met before they are obligated to buy the next home. I'll have a post on this type of purchase in the future.
Attorney Approval: There is usually a condition within the purchase offer that states both the buyer and sellers attorney must approve of the contract. This contingency is usually satisfied within 7 calendar days per the contract.
Property Inspection: I highly recommend to all my clients that they have an independent property inspection conducted on any property that they are in the process of purchasing. The contingency is generally written with a 7 day time frame on it. It's in the sellers best interest to ensure the buyer completes this asap so that any findings can be dealt with and if unable to be overcome -- the property can be put back on the market.
Other Contingencies: This is where other items can be added if necessary.
Possession or Closing Date:
This is usually the date that the legal ownership of the property transfers from the seller to the buyer and, unless otherwise noted, when the funds for the purchase are concluded.
Most closings in this area close between 45 and 60 days. Depending on the sellers situation -- delaying the closing makes the buyers offer less attractive. Often times this can be as important as the amount of the purchase offer.
In some situations, it is a benefit to the seller to be allowed to retain possession after closing (i.e. they are building and need time to finish their new home.) In this situation, a flexible buyer's offer might actually be better than a higher purchase price non-flexible offer.
Purchase Price:
This is the amount that the buyer is offering to pay for the property. The price is usually dependent on market conditions and may differ from the seller’s current asking price. In all cases your Realtor should use similar properties that have sold within the past year to give you an idea of what this home is worth. The offer price is ultimately up to you.
This post I'll talk about the last three main parts of the Purchase Offer. The next component of the purchase offer is any contingencies that must be satisfied prior to the closing taking place.
Contingencies:
Mortgage Contingency: A condition in the contract that protects the buyer in the case where they cannot obtain a mortgage from a lender or that loan isn't within the terms that they spelled out in the contract (i.e. interest rate.)
Sale and Transfer Contingency: This is used when a buyer hasn't sold their home yet and makes the sale of that residence a condition that must be met before they are obligated to buy the next home. I'll have a post on this type of purchase in the future.
Attorney Approval: There is usually a condition within the purchase offer that states both the buyer and sellers attorney must approve of the contract. This contingency is usually satisfied within 7 calendar days per the contract.
Property Inspection: I highly recommend to all my clients that they have an independent property inspection conducted on any property that they are in the process of purchasing. The contingency is generally written with a 7 day time frame on it. It's in the sellers best interest to ensure the buyer completes this asap so that any findings can be dealt with and if unable to be overcome -- the property can be put back on the market.
Other Contingencies: This is where other items can be added if necessary.
Possession or Closing Date:
This is usually the date that the legal ownership of the property transfers from the seller to the buyer and, unless otherwise noted, when the funds for the purchase are concluded.
Most closings in this area close between 45 and 60 days. Depending on the sellers situation -- delaying the closing makes the buyers offer less attractive. Often times this can be as important as the amount of the purchase offer.
In some situations, it is a benefit to the seller to be allowed to retain possession after closing (i.e. they are building and need time to finish their new home.) In this situation, a flexible buyer's offer might actually be better than a higher purchase price non-flexible offer.
Purchase Price:
This is the amount that the buyer is offering to pay for the property. The price is usually dependent on market conditions and may differ from the seller’s current asking price. In all cases your Realtor should use similar properties that have sold within the past year to give you an idea of what this home is worth. The offer price is ultimately up to you.
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