BUYING A FOR SALE BY OWNER HOME  
   
Written by Susan Wilcox

[ disclaimer ]

MAKING THE OFFER
A real estate offer is made on a "purchase agreement" that outlines the terms of the offer as well as your legal obligations and that of the seller. Bell Title Company has provided a purchase agreement and many other documents for MichiganEhomes.com users. The offer will include, among other things:
• The purchase price for the home.
• The down payment you plan to make.
• The type of loan you expect to get.
• "Contingencies" – do you need to sell your home first? Do you want to delay the closing date? Are there items on the property you would like to be included in the sale? Is the sale dependent on a favorable home inspection?
• A description of your right to a seller's disclosure about the condition of the home.

How much should you offer for the home? The asking price? More? Less?

First of all, what kind of market are you in? If it's a "sellers' market" where there are many buyers but few available houses, you will be competing with others to have your offer accepted. In this case, you will have to:
• Move fast. In the time it takes to "sleep on it," the house could be sold.
• Offer the asking price or more – it's doubtful that the seller would negotiate downward!
• Take measures to make sure your offer is a "strong" offer in all respects.

A "strong offer" is one that shows the deal is likely to close on time; that is, the transaction will be successfully completed within 30 days or so. The most common reason this doesn't happen is the failure of the buyer to get a mortgage loan. So any proof of your ability to get financing strengthens your offer.

Remember that preapproval letter from your lender or broker? Attach it to your offer. It assures the seller that you will be able to get your loan. Likewise, if you can provide proof that you have your down payment in hand. A "verification of deposit" from your bank will put your seller's mind at ease and help him to look more favorably at your offer.

Offers with contingencies are considered weaker offers. If you have to sell your home first, that is a complication that could raise eyebrows. And what if the seller plans to take that backyard spa with him?

On the other hand, a "buyers market" happens when there are more homes for sale than there are people to purchase them. Homes tend to be sold more slowly, which puts you in a stronger position. In a buyers market, you can:
• Take your time in considering whether to buy a home.
• Offer less than the asking price.
• Ask for more concessions from the seller (repairs, cosmetic work, etc.)
• Make an offer without financing in place, or ask for creative financing such as having the seller carry part of the loan.

Once you make an offer, you will either:
• Have it accepted.
• Have it rejected.
• Have a counter-offer made to you and, perhaps, to others making an offer.


If the seller decides to accept your offer, he must give you a written disclosure about the condition of the property. In most cases, he will do this before you both sign the purchase agreement so you can look at the forms first. The seller must also indicate compliance with the Seller Disclosure Act either on the purchase agreement or in a separate document.

Sometimes, the purchase agreement is signed before the buyer receives the disclosure forms. In that case, you have 72 hours to back out of the deal if you don't like what the disclosure reveals. If the disclosure form is mailed to you, usually via registered mail, you have 120 hours after delivery to terminate the agreement.

One more thing: when you sign the purchase agreement, you will be expected to submit "earnest money" – a deposit on the purchase price. The seller may hold this deposit, but it’s a better idea to have a neutral third party hold the deposit such as title company. Many title companies will provide this service at no charge if you agree to use them to handle your closing. Click here for a list of local title companies that provide this service.

If you back out of the deal for reasons other than those listed as contingencies in your purchase agreement, usually things like failure to get your loan or problems with the property's condition, you will forfeit this deposit.



    
     

 


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