5 Things to Consider Before Writing an Offer

Today I’ll discuss a few things that you need to know before writing an offer on a home.

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So you’re searching for a home: You’ve hired a real estate agent and you’ve looked at a bunch of properties in person, and now you’re ready to write an offer.

First, you’ll fill out a purchase agreement form that has all of the details of your offer. After reviewing it, the seller will be able to either accept that offer, counter it, or decline it altogether. Here are a few things to consider before signing off on that offer:

1. Purchase price. The purchase price is determined partially by the list price of the home, but also by comparable properties in the neighborhood. Be smart about the price that you offer to the seller—ask your real estate agent for advice.

2. Earnest money. Earnest money is not required, but it’s so common here in Minnesota that it’s really frowned upon if you don’t include it in your offer to buy a home. Essentially, earnest money is your promise to the seller that you’ll fulfill all the terms of the purchase agreement, and if you cancel for some reason not covered in the purchase agreement, that money goes to the seller as compensation for taking their home off the market. Earnest money becomes part of your down payment at closing, but it’s due earlier in the process.

One great way to set yourself apart from other potential buyers is to meet the closing date that the seller prefers.

3. Closing date. The market in Minnesota is really hot right now, creating a lot of multiple-offer situations as a result. One great way to set yourself apart from other potential buyers is to meet the closing date that the seller prefers.

4. Financing. Before you write an offer, know what type of financing you qualify for. You should already be pre-approved with your lender, but different types of financing can set you apart from other potential buyers.

5. Contingencies. Contingencies are not automatically included in the purchase of your home or in your offer, and they can be negotiated. One way to stick out in the crowd in this hot market is to remove as many contingencies from your offer as possible. A contingency is basically a safety net for the buyer—a way that they are able to back out of the purchase and get their earnest money back. Inspections, financing, and the seller being able to find a new home are all types of contingencies.

If you have any questions about today’s topic or suggestions for content you’d like to see covered in future videos, don’t hesitate to reach out to the Pemberton Homes Team. We hope to hear from you soon!