After considerable time spent searching, whether online or in real life, you’ve found the home that’s just right for you and want to make an offer. Now what?
If you’re working with an agent using the Arizona Association of REALTORS standard resale contract, there are five key pieces of information you’ll need to decide upon before submitting your offer:
1) The offer price. Unless you’re in the mood for a random guess, make sure you check the comparable sales to ensure the list price is within reason. Also keep in mind the state of the market … if you’re bidding on a bank owned home priced under $200,000, for example, a bid below market value likely isn’t going to get too far. In other parts of the Valley and other price points, there may be more flexibility.
2) Closing date. In theory, a cash offer can be closed in as little as 10 days. If the property is inside a homeowners association, you’ll need a little more time as the HOA has 10 business days – not calendar days – to supply the requisite HOA information – the CC&R’s, financials, etc. If you’re financing, you want to make sure you’re giving your lender enough time to get the loan done. How will you know if you have? Ask!
3) Personal property. Very general rule of thumb is if it’s nailed down, it stays with the home – this includes window coverings, built-in appliances, flush mounted speakers and the likes. Other items, most commonly the refrigerator, washer and dryer, usually are negotiable. Keep in mind that on a bank owned home, personal property isn’t going to be part of the contract even if these items are still in the home. (As for why, that’s another post for another day.)
4) Earnest deposit. This is essentially a good faith deposit that is delivered to the title company when escrow is opened. Should there be any kind of dispute, the title company decides whether the earnest deposit goes to the buyer or seller. There also are a number of contingencies that would allow a buyer to get their earnest deposit back. In short, the bigger the earnest deposit the stronger your offer is going to look. Once the offer has been accepted, the earnest deposit typically is deposited the next business day.
5) Additional concessions. Do you need to ask the seller to assist with your closing costs? Do you want the seller to purchase a home warranty? Do you want to agree up front that you’re aware you’re purchasing a bank owned home and no disclosures will be provided? All of these (aside from the home warranty, which is elsewhere) appear in the free-form section of the resale contract.
Big disclaimer – there are few (as in, almost no) statutory protections for buyers or sellers in a real estate transaction; items such as the length of the inspection period and contingencies for appraisals, repairs, disclosures and HOA rules all are present only if they are written into the contract.
The AAR contract addresses many of these (and many brokers seem to add additional disclosures on top of this, some of which already are in the contract itself.) If you’re doing it yourself with one of those forms you can purchase in an office supply store, be aware they may not give you anywhere near the level of protection you have through the AAR contract.
[tags]Phoenix real estate[/tags]