A projected loan closing date: This is typically 30 to 60 days, though how long your lender's underwriting process takes can be the deciding factor here. Contingencies: Any contingencies that the deal is subject to more on these in the next section. Disclosures: Other state-required provisions or disclosures. Sometimes buyers are encouraged to write a personal letter to accompany their offer, hoping to gain an emotional edge over competing buyers. Though these may seem harmless, so-called buyer love letters can contribute to housing discrimination.
Additionally, it's important to know that this type of letter does not have any legal bearing on the transaction. Your written offer will likely include a least a couple of standard contingencies. These are things that need to happen before the sale can move forward. Common contingencies include:. Final loan approval: In other words, you getting the mortgage, often within a specified amount of time.
Home inspection: In addition to requiring that the property undergo a home inspection, this contingency may also specify how issues revealed during the inspection will be addressed for example, if the seller will repair or provide a credit at closing , or if the inspection is for informational purposes only. Appraisal: Lenders generally insist on verification of the home's value via an appraisal, as they don't want to lend you more than the property is worth.
Home sale: This is a less common contingency that means the purchase relies on the completion of another, separate transaction. This is usually either the sale of your current home or the seller finding a new home. Although you have to protect your interests and gather enough information to make a wise purchase, contingencies may act as roadblocks to getting a deal done — especially in hot markets.
Seller disclosures , on the other hand, are usually required by law. However, states differ in the types and amount of information that sellers must disclose; and sellers are not necessarily aware of every potential problem that a property may have. Disclosures may also document details like homeowner association obligations and which appliances and fixtures convey with the purchase. Your offer should establish a time frame for receiving all required disclosures from the seller.
For one, you can waive contingencies. Though this can be risky, it can get you a leg up on other buyers who may be including one or more contingencies in their offers. You can also:. You can also include a personal letter with your offer to purchase. Address the sellers directly and let them know exactly what you love about the home and your plans for it.
Pulling at their heartstrings a bit may just be enough to put your offer ahead of another's. If you're looking to purchase real estate in the near future, then understanding how an offer to purchase works, as well as what makes one appealing to a seller, is critical. And if you need more guidance in crafting yours, be sure to consult a real estate agent in your area. They can help make your offer the best it can be. Our team of analysts agrees. These 10 real estate plays are the best ways to invest in real estate right now.
Find out how you can get started with Real Estate Winners by clicking here. Aly J. Yale is a freelance writer and journalist from Houston. She currently covers real estate, mortgage, and finance topics … Learn More. Advertiser Disclosure We do receive compensation from some affiliate partners whose offers appear here.
Millionacres Logo. Tax Deductions Depreciation Capital Gains. New York City Denver Philadelphia. Local Real Estate News. Research Real Estate Glossary. Podcasts Webinars Videos. View Memberships. Search For. What is an offer to purchase? Regardless of its name, an offer to purchase generally includes the following points of information: The names of both the buyer making the offer and the home's seller.
The proposed purchase price of the home. Decline the offer. The seller offers you different terms. If the seller counter-offers, you can then accept, counter, or decline as well. Once your offer is accepted or you accept a counter-offer , you sign the purchase agreement. This period of time is called the contingency period, and any inspections, appraisals, or anything else built into your purchase agreement will take place. Share facebook Created with Sketch. The offer letter is a legally binding document that needs to comply with the laws of your state.
It can also include other important information such as:. A breakdown of the closing costs and who is responsible for paying each one. For a personal touch: A handwritten note from the buyer to help you stand out in a competitive market. Contingencies are conditions in the offer letter that the seller should agree to if they accept your offer and want the deal to proceed.
You and your agent can decide what to address. Standard contingencies include making the house available for a home inspection and disclosing any hazard inspection findings or structural issues with the house. Negotiating with the seller is always worth trying, even in a hot housing market. As mentioned earlier, plan for your first offer to have a little wiggle room. Other than straight-up negotiating the amount, here are some other ways to negotiate the overall price:.
As mentioned, being light on contingencies in your offer letter is more appealing to the seller. One common negotiation tactic is to ask the seller to waive or pay for certain closing costs. At this point, you could ask for something in exchange for taking care of the repairs yourself—like credit from the seller or an appliance to be included in the deal.
The seller will have to agree to match the appraisal value or the whole deal could fall through. This is when the seller receives more than one offer at the same time.
The seller could ask the buyers with the highest offers to come back with their best possible offers by a set deadline.
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