Back to the Basics: Buyers Checklist - Let's Write an Offer
by John Occhi, Hemet CA REALTOR
Mission Grove Realty
FOR MORE ARTICLES FROM THE "BACK TO THE BASICS" SERIES, CLICK HERE
"Back to the Basics" is a series of articles that I am publishing as I reassess my own business and review the materials that I used to initially learn this great business we call Real Estate.
Unfortunately, many of the items I have saved on my computer do not reference their original source, to give credit to, so I do not take full credit for developing the material. However, in most cases, including this one, I know that I have re-vamped the material, making it personal for me and my style.
I hope you will both learn from it and enjoy.
The Buyers Checklist
When negotiating a contract to purchase a home in the Hemet / San Jacinto Valley, Riverside County, The Inland Empire or anywhere else in Southern California or the test of the country, there are certain things that remain consistent with every good offer.
1) What is to be included or excluded from the sale? Are there special ceiling fans or attached light fixtures that have helped sway your opinion. If so, I suggest a digital picture to document what is there at the time of the offer. I am sure I am not the only REALTOR® that has negotiated a contract with an expensive Casablanca Ceiling fan installed in the family room only to show up after the close of escrow and find a $99 WalMart special hanging.
When in doubt - Document
2) Who is going to pay for what? Are there repairs that must be completed prior to the close of escrow? Perhaps the lender is insisting that certain things be done before they will fund the loan. We all know the VA loans come with some very stringent inspection criteria. So, if there is something that needs to be done prior to the close of escrow, who will pay for the work? What happens if it is an improvement that the buyer wants as a condition of the sale, does it make tit the sellers responsibility to pay to have the work done, just because they agreed it could be done?
When in doubt - Document
3) What does the Buyer have the right to Inspect...and When? California Residential purchase Contracts have standard language that can be superseded with a simple mark in a check box. Fully understand what your rights are and understand that you have the right to use third parties to perform the inspections.
Make sure you reserve the right to thoroughly inspect the entire property and all of its systems. In addition to the home, you may have the opportunity to inspect a septic system, a well, the roof, the pool, the heating and air conditioning, plumbing and everything else about the home. If you don't inspect it, you can't come back and complain about it later.
Make sure your timeline for inspections is clearly spelled out as well and if you are going to make a "Request for Repairs" understand when that deadline expires and don't allow that to happen without having made your request known to the seller.
4) What about the Sellers Disclosure obligations? In California, I often joke with my clients that we have disclosures disclosing the fact that there are disclosures to disclose what is wrong with the property. Many of our forms are a catch-all and intended to cover just about every conceivable issue that could potentially be raised by a buyer.
However, do not rely strictly on the standard disclosure forms. There is nothing preventing you form preparing your own set of disclosures that you want the seller to respond to, so long as they are legal and do not violate fair housing laws. In other words you can't ask how many children live in the neighborhood or how many families of a specific race or religion are in the neighborhood. You can ask very specific questions about city services and school rankings, for example if these are important to you and your decision may be based on this criterion.
5) What about the maintenance on the property until escrow closes? Common sense will dictate that the seller will continue top take care of the home, because after all it is still theirs and until escrow closes - escrow can always go sour and not close. So, yes you want to make sure the landscape is continued to be maintained - no the seller cannot save $50 and not water the lawn.
However, what will happen if the seller moves out early and say relocates to an entirely different region than the Hemet - San Jacinto Valley. Will they have a landscape company maintain the yard and the pool? These and other issues must be addressed at the time the offer is made, prior to it being accepted.
6) What warranties are in place? Is there a home warranty? Are the appliances under warranty? How about any of the systems or structure of the home? Will the seller guarantee anything themselves about the home that is not covered elsewhere? If there is a home warranty policy issued, what does it cover? Can an upgrade be negotiated? What will it cost to extend the policy for additional years?
When in doubt - Document
7) What will happen if either party defaults on the contract and does not live up to it's terms? Under what conditions will the good faith earnest money deposit be forfeited? What repercussions does the buyer have if the seller defaults? Are all parties in agreement with an Mediation and Arbitration clause in the contract? What, if any are the limits of any award by the other party? Again, much of this is standard language in a California Residential Purchase Contract...but is the clause in effect or has it been modified?
8) When will possession be passed? Many times the seller cannot move for a few days until after escrow closes because they don't have the cash on hand to move. Although it is still customary to take possession of a home on the day escrow closes there are many situations when possession is transferred up to three days after the close of escrow.
If for whatever reason it is agreed that the seller can remain in possession for anything longer than 3 days, the seller should enter into a rental contract with the buyer and pay a daily rent that equals a pro-rata share of the full PITI (Principal, Interest, Tax & Insurance) for the home plus utilities. It is extremely rare that a seller will have to stay past the close of escrow or that a buyer would be willing to allow this.
So, if you are looking at buying a Hemet home for sale, please remember that the purchase price, although very important, is not always the most critical aspect of a offer to purchase a Hemet home for sale.
Please make sure you check back often for more articles on Back to the Basics to hone your real estate skills.
So, Until Next Time,
Have a Blessed Day,
by John Occhi, Hemet REALTOR®
Mission Grove Realty
Comments (8)Subscribe to CommentsComment