earnest money
Presenting the offer
Colonial brick on a shaded hillside
When you’ve finally picked out the condo, house or townhouse that interests you, it’s time to write the offer. Together with proof of Earnest Money, and lender approval, I’ll present the offer to the selling agent.
Presenting an offer is a little bit more involved than simply faxing paperwork to the listing agent and then waiting for a response. It is important to get the offer over as quickly as possible. Bargains (in any market) don’t last long. Then I call the listing agent to let them know the offer has been faxed.
When appropriate, I follow up in the conversation by sharing appropriate details with the listing agent. For example:
I can give the selling agent some personal background about my clients and what they are looking for. I can explain why they are qualified to buy or how many homes my client has looked at. In some cases, it’s appropriate to tell seller what the buyers appreciate about the home.
I sometimes provide the sellers with a comparative market analysis to show the sellers the rationale behind the offer we are making.
Of course, it’s my job to explain and review all of the major details of the offer;
Wooster Mercer Lofts
- contingent or non-contingent,
- inspections,
- date of closing,
etc. - and of course, price.
When necessary I discuss a brief timeline outlining the expected milestones between the offer and settlement.
 Will Nesbitt |
About the Author — Will Nesbitt is the principal broker of Will Nesbitt Realty and maintains Condo Alexandria. Will specializes in condos, townhouses and single family residences in Alexandria, Arlington, Fairfax County, Crystal City, and Kingstowne. Will resides in Belle Haven Estates just outside Alexandria VA in Fairfax County. |
Writing the Offer to Purchase
When you’ve picked out the house, townhouse or condo you want to make your own, it’s time to write the offer. An offer is a written description of the terms under which you the buyer would purchase the subject property. If the seller accepts your terms the next step would be to proceed to closing and thus full ownership of the property. Although most Realtors in Northern Virginia use the standard Northern Virginia Association of Realtors contract there are many possible contingencies, addenda and options that will alter the offer to make it specific to your situation.
One of the most common contingencies added to the offer is the “financing contingency”. This contingency specifies that if the buyer cannot get financing then the deal is off and the earnest money is returned to the buyer without penalty.
Another matter that must be address in the offer is the down payment. One way that the down payment differs from the earnest money in that the down payment is paid at closing rather than at the time of the offer. The seller wants to know the buyer’s down payment amount because it provides further further evidence of the buyer’s qualifications to secure a mortgage.
The offer also describes the interest rate and some terms of the proposed loan. The rates and terms described in the offer are not an offer of credit from a lending institution and do not reflect the loan that the borrower will receive. Rather, the rates and terms are describe to provide a safeguard against any dramatic change in interest rates between when the offer is made and when the loan is closed. In other words if the rates double but the buyer is still approved for financing the buyer could cancel the offer because the terms exceed what he can tolerate financially.
Every purchase will have closing costs. Both buyers and sellers have expenses at closing. Buyers, especially first time buyers, are usually scraping for down payment and closing costs. The seller cannot help with down payment, but the seller can subsidized the buyer’s closing costs. If so negotiated the seller can pay all or a portion of the buyer’s taxes, origination fees or title insurance. This money comes directly from the seller’s pocket so if buyers who need assistance can expect to pay a little higher price than those who do not need a subsidy.
Although the seller cannot help with down payment, the seller can offer some or all of the financing. The terms of the offer will describe the loan that the buyer expects to receive from the seller.
When we make the offer I can help advise you on what terms and conditions will best suit your unique circumstances and what terms are mostly likely to be acceptable to the seller.
