What should I pay attention to when makeing an offer?

Question

I am a first time home buyer. I have been house hunting for quite some time now; so I am quite familiar with house hunting process: call my agent about new listings and go to open houses. But I just realized, I know nothing about the home purchase process, once I find the property that I like. I know I am suppose to make an offer, but...

1. what are the procedures? What type of written contracts and/or disclosures I should be attentive to?

2. When I make an offer, what type of written statements/conditions I should have with my agent and buyer?

3. Do I go through the same procedures if the property is a regular sale, short sale, or foreclosure?

4. What else should I be aware before I make an offer?

Thank you for your inputs

Answer 1

But...  What the heck am I signing?

You need to sit with your agent and have him/her explain it line by line before you find your dream home.  Run, don't walk, if they can't do that for you.

Get a copy of the contract you will be filling out and read it, before you find your dream home.

This will allow you to look at it objectively.  

You should also submit the required documents to your lender and have an approval letter ready along w/a copy of your proof of funds.  (Proof of funds is simply the bank statement or other source for your downpayment.  Black out any social security or account numbers when submitting this with your offer.  The seller doesn't need it.)

You need a buyer consultation, it's too much to explain it all here.  Contact me through my profile and I can get you set up with someone who knows what they are doing in your area.  

If you are in Orange County, I would be happy to go over all of this with you in person, whether you use my services or not.

Answer 2

get pre-approved first by a loan officer in your area

when making any offer have your agent do it

1st condition is full underwriting approval as these are changing daily in this business.

If you want sellers assistance with closing cost and the things you may want to stay in the home like refrig etc

The process is pretty much the same but foreclosures and short sales  can take several months to get done

I am a Mortgage banker in TN & KY

Answer 3

Your first concern is to make an offer with means to cancel.

        (1)   Your offer is contingent upon your ability to obtain financing at specific level you can afford or must pass an independant inspection and require less than $X in repair or deferred maintenance or not be in a flood zone/fire zone or other category of unusual insurance risk. Or subject to your Mothers written approval to be made or waived within ten days of the acceptance of the offer. Anyone or more should let you dip your toes into the prospective homeowner pool without worrying about drowning in your self-made misery. A good broker should be retained to protect you.    

    The paperwork is ordinarily common mutually used by the local real estate community. It will have little surprises and be generally neutral. If you are not offerred a standard contract you need have it reviewed by a real estate attorney which should be an unnecessary burden that would compel me to avoid this type of transaction.

     I find so few short sales being accepted by lenders that I would by-pass any offerred properties as being dramatically time wasteful and useless. If you have time to spare, it might work but know the lender will stretch out the acceptance time by months seeking to obtain higher bids and using your bid as the means to entice bid-overs. Most realtor are horribly incompetent to handle short sales and you might be better off placing an accountant or attorney in charge of negotiations and paperwork.

    Foreclosures are neater and cleaner. Either the lender wants to move the property or not. Add a provision to the contract that unless written acceptance is received in five to seven days, the offer is withdrawn. This is minimize any uncertainty and compel the lender to make a committment.

    Be aware of your real estate market. Here in California home prices are in freefall and will likely move lower for two years. (The area of San Fransisco is unusually stable causing many of its residents to smirk at the rest of the state...For their sake I hope this continues).

        Properties in oil rich states like Texas, Oklahoma and even Louisianna have stabile

or increasing real estate markets due to oil industry growth

       Your real estate choices are increasing as the bulk of the number of potential foreclosures are nowhere close to peaking.

       Your underlying concern should be that you keep your entire house expense debt including interest, principal, taxes and insurance to the principal income owner one week's net income. If you find a property within this financial limitation. You should be well to sleep at night. Finally, if you enjoy a steady income look into a loan that allows you an option to pay every two weeks. This reduces a 30 year loan by ONE-HALF. And when and if things get tight you can always go back to making regular monthly payments and be the lenders bestest friend.

Good Luck

Answer 4

Sit down with your agent and have them show you a copy of the purchase agreement.  They should explain the standard clauses which are likely preprinted on the agreement and also talk about the conditions that you would want to include.  Two very common ones are inspection and financing approval.   You want to get pre-approved so you know your price range, but you still want that financing condition.

Your agent should also walk you through the process, the time period when your offer is open to the seller, the time period for the condtions to be satisfied, the amount of deposit (ernest money) to be paid.

Answer 5

That's what realtors are for, to walk you through that process.  Talk to your agent, they can advise you on the procedures and rules in your area, since they vary by location.  

If your agent is unsure of the process, you need a new agent.