Down Payment and Financing are a Part of the Offer
You will want to base your offer on the contingency that you can get financing for the purchase of the home. As part of your offer, you inform the seller of the amount of your down payment. This gives the seller some information on the likelihood of your getting financing for your mortgage. In a volatile market, you may want to indicate the parameters of what interest rate is acceptable to you in for financing the loan. Your offer should also contain information on the type of loan you are applying for so they understand the genuineness of your offer. You will want to put a significant amount of money down as earnest, again, so that the seller knows you offer is meaningful and will accept it.
Include Clause Regarding Condition and Disclosure
You will write into your offer that you require the seller to disclose negative conditions of the house that are not readily apparent that would affect your decision to purchase the home. You will want your offer to state that the disclosures must be timely. Another thing you will want to require is a reasonable condition of the house at the time you take possession. This would include things like requiring that the appliances work including the heating/cooling system, the roof doesn't leak and the plumbing is functioning.
Home Inspections are Crucial
You want to have a professional home inspector and go through the house and seek out potential problems. They may find issues that even the seller is unaware of. The seller should want this inspection quickly. If both buyer and seller are satisfied with the inspection the sale can proceed. If there are conditions that you find unacceptable, you may negotiate with the seller either having the repairs made or compensation on the price to leave "as is". If you can not come to an agreement you can cancel the purchase without penalty and receive back your earnest.
When to Ask for Closing Costs or Incentives
If a seller needs to get out of their house quickly, they may be willing to pay to all or some of the closing costs. One common request is requesting the seller to lend funds to buy down your interest rate for the first year or two. If you are having trouble with your ratios, this might be something to consider. A seller giving these incentives is less likely to lower their price.
Before Signing the Papers Make the Final Walk-Through Inspection
The buyer is allowed to do their own inspection one or two days before closing to ensure it is in the same condition as when you offered or to inspect to make sure that required repairs have been made. The right to do a final walk-through needs to be included in the offer.
Good luck on finding the right home, and if you need a safe, low-interst loan from a highly trusted mortgage expert then please give me a call. My name is Bill Wolfe and you may reach me at:
bwolfe@apmortgage.com or 916.960.5438
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