Questions: Besides price, what are the important terms that will make up my total offer? What can I do to make it appeal to the sellers?
Answer: You want the protections that many of the boiler plate terms will offer - like the inspection and financing contingencies. And your seller will want as close to a sure thing as they can get. Here are some of the terms and conditions that can make your offer more or less attractive, whatever the price:
Earnest Money: this is a good faith deposit, usually around 5% of the amount of your offer. Should you default on the contract, this money is at risk. The bigger the deposit, the better you will look to the sellers. - Home Inspection Contingency: getting an inspection is an absolute must. The custom is to allow about a week for you to get in a compulsive house nerd who will let you know what you are getting into. If the inspector finds something awful, the contingency allows you to walk away. If there are multiple offers, you might want to consider a "pre-inspection". It will make your offer cleaner, but you may shell out hundreds of dollars for a home inspection, whether or not your offer is accepted. And while sellers are willing to allow you to walk on a whim if you're their only offer, in multiple situations they might balk.
- Settlement Date: I will call the listing agent before writing the offer to find out what the sellers need. If the house is vacant, they probably want to settle quickly. Otherwise, they might need additional time to get out. This is something where I generally recommend that you give the sellers what they need.
- Financing Contingency: if you can't get the loan for whatever reason, having a financing contingency allows you to walk away. If you have been pre-approved for a mortgage, waiving this might be worth the risk that your loan will not get approved.
- Type of Financing: FHA and VA loans may require the sellers to make repairs as a condition of loan approval, and there are often complications with appraisals. These products not be as attractive to the sellers as conventional financing.
- Appraisal Contingency: in the DC area, our boilerplate contracts allow buyers with financing contingencies to get out of the deal if it doesn't appraise. Without a financing contingency, you need an appraisal contingency to protect yourself - especially if you're paying over market in a bidding war. However, including an appraisal out makes your offer a whole lot less attractive to the sellers, especially if you are paying too much for the house! Without it, you may have to dramatically increase your down payment or lose your earnest money.
- Conveyance List: here it is customary for the appliances and any "fixture" attached to the house to stay. If there are any exceptions to that rule, they should be set out in the seller's disclosures. If they want to take the antique chandelier or the washer and dryer, this is where they lay it all out.
There are other factors that could influence the sellers - and more important, the listing agent who is advising them. Once in a multiple situation, the buyers who were more attractive on the surface insisted on using a huge national lender with whom I had recently had several nightmare experiences. When they insisted on using these guys, and the other buyers got the house.
Another factor is the agent who is representing you. If the listing agent has had either wonderful or awful experiences with your agent in the past, it could impact the sellers' decision.
When you do find The One, it's best to act as quickly as you can to get your offer prepared and presented to the sellers. Whatever you decide to offer in terms of price and conditions, you are better off if you are the only offer on the table. And the longer you wait, the more likely that someone else will jump in to compete - especially if it is a great house is a great location at a reasonable price. Ya' snooze, ya' lose, at least sometimes.
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