Once we find your NextHome, we will need to discuss the offer terms and gather information to complete the Offer to Purchase and Contract form. The first thing that most people think about is the offer price, but there is much more to consider. Read below for information on some of the items you will need to decide when you are ready to take that next step.
- Purchase Price. Together, we will review comparable home sales, market conditions, and your financial plans to determine how much you would like to offer for the home. I will provide guidance and a recommended price range based on my experience, however like all terms of the contract, the ultimately decision is up to you.
- Seller Paid Closing Costs. In some cases, you may want to ask the seller to pay for some portion of your closing costs. If so, you will need to indicate the specific amount you are requesting. Your lender can provide you with an estimate on how much your closing costs will be. As you consider asking the seller to contribute toward your closing costs, keep in mind that for the seller, paying some of your closing costs is equivalent to a reduction in the purchase price.
- Due Diligence Fee. This is an upfront deposit paid directly to the seller, which is non-refundable, but it does go towards the purchase price of the home. This money is due if and when we come to terms and have a signed contract from the seller, but it is not paid if we do not come to an agreement. As the buyer, it is your goal to get this amount as low as possible to limit your risk, and the seller’s goal to get this as high as possible to limit their risk. The amount of this deposit will be whatever we negotiate and agree upon with the seller. In a competitive, multiple offer situation, due diligence money is often a deciding factor between two otherwise similar offers.
- Earnest Money Deposit. Earnest money is another deposit that is typically due once we have a signed contract, and it also goes toward the purchase price of the home. Unlike the due diligence fee that is paid directly to the seller, this money is held in an escrow account with your closing attorney. Generally, the earnest money is refundable if you decide to terminate the contract for any reason within a certain amount of time called the due diligence period, but becomes non-refundable after 5PM on the agreed upon due diligence date. Typically, all inspections, negotiations, and the appraisal are done by this date, and we are just waiting on the lender to finish things up. Earnest money is an important part of the offer, but typically less important to most sellers than the due diligence money since it is refundable during your due diligence period.
- Due Diligence Period. This is the amount of time you have to complete your “due diligence,” which includes things such as inspections and an appraisal, and to negotiate any repairs or seller concessions before your earnest money is at risk of being non-refundable. We want to be sure you have enough time to complete your investigation of the home, while understanding the seller typically wants to get through this period as quickly as possible.
- Closing Date. The closing date is often dictated by your lender, but most transactions in our market close within 30-45 days. The seller may have different preferences for a closing date based upon their situation, but it is a good idea to be prepared with an understanding of the quickest you can and would be willing to close.
- Closing Attorney. As part of the offer, you will indicate the attorney that you plan to use. If you do not have a real estate attorney that you prefer, I can provide a recommendation.
- Personal property. When reviewing the Offer to Purchase and Contract form, you will find a list of items that are considered a “fixture” in North Carolina and these items will automatically stay in the home. Anything that is not considered a “fixture” is considered personal property and must be removed prior to closing. Things such as a built-in microwave, dishwasher, stove, and window blinds are considered a fixture, however other items such as a refrigerator, washer/dryer, non-permanent hot tub or above ground pool are considered personal property. If there are items that you want to include, we can often negotiate for the seller to leave some personal property items; however, it is a good idea to limit this list as many lenders will have an issue with an excess amount of personal property.
- Home Warranty. Home warranties can provide some peace of mind on your new home purchase. They cover various repairs for unexpected things that could arise such as issues with the HVAC system or a broken water pipe. There are, of course, restrictions and limitations to warranties, and there are many plans on the market you can choose from. As part of the Offer to Purchase and Contract form, you will need to indicate if you want the seller to pay for a 1-year home warranty for you at closing. This is also something you can purchase yourself later. If you would like to consider a home warranty, now is a great time to research some different companies and plans. I am happy to provide some recommendations and information as well.
Now that you have an idea of the information that we will need to discuss when it is time to put in an offer, you can feel better prepared if we need to move quickly once we find your NextHome.
As always, feel free to reach out with any questions! You can call or text me anytime at 919-949-8850 or email at firstname.lastname@example.org.