Smart Offer
When it gets serious!
Platform
Offer Process
Accepted offer
- Initial deposit – typically $1,000
Inspection Contingency – 5-10 days later
- Home inspector – from $500 to $1,000 (dependent on size of home)
- If problems, you can negotiate or exit agreement (and get deposit back)
Purchase and Sale agreement (aka P&S) – 1 to 3 days later
- Deposit of 5% of purchase price MINUS the initial deposit
- Attorney costs – approx. $500 - $1500*
- Included in closing costs if same attorney used for P&S and closing
Submit mortgage application – 1 day after P&S
- Lender/ Bank
Mortgage contingency date – 4 weeks later
- You can exit the contract if you don’t get financing and still get full deposit back
- If you get financing, no backing out!
- If you’re denied financing, you back out and full deposit is returned
Closing - 14+ days later
- Remaining balance of purchase price
- Closing costs
Inspection Strategies?
FACT: every home, even new construction and homes that have been extensively renovated and appear to be perfect, ALWAYS have some issues.
Request inspection – traditional approach
- Seller absorbs the risk
- Seller concerned their house could come Back On Market!
Waive inspection – risky but sellers love this!
- Buyer absorbs the risk – go straight to P&S
- Eliminate your risk with pre-inspection but incur fee
Increase deductible on inspection
- Shared risk
- Example – buyer agrees to cover first $10,000 of repairs revealed by inspection – any amount over is negotiable
Financing – who’s picking up the tab
Loan-to-value ratio
- How much are you borrowing compared to the sale price of the home?
- The higher the down-payment, the stronger the offer
- The higher the down-payment, the lower the risk to the bank
Home value determined by appraisal NOT sales price
- Appraiser bases home values on ‘Comps’ – comparable homes that sold recently in the area
- If home appraises lower than sale price, you may need to increase your down-payment
Your income and assets
Your credit score
Closing Costs?
Numerous ‘closing cost calculators’ online
- Based on location (county) and sale price
Main components:
- Lenders fees (PMI, Appraisal, Survey etc)
- Homeowner insurance
- Title insurance
- MA Stamp tax
- Gas/Oil left in tank for heating etc
- Seller adjustments for taxes, condo fees
Attorney – can’t I just do it myself?
Attorney is required to buy, or sell, a home in MA
Buyer has two attorneys
- Represent the buyer
- Represent the bank
- Many attorneys can represent you and the bank – lower cost
Recommend a real estate attorney
- Transaction will be much smoother
- Will be familiar with our forms, regional town regulations, local zoning, insurance etc
- Advise on title holding of the home – tenants in common, tenants in the entirety, trusts
As with lenders – we have a list of recommended attorneys
Ready to Start Your Home Search?
Why not have one of our awesome agents come out and explain everything above and more in greater detail?