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 addressed 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 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 subsidize 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.
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 addressed 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 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 subsidize 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.
