HOMEPURCHASE 101/First Time HOMEBUYERS (part two)

Writing Your Offer
Now that you've decided on a home to purchase, how much do you offer?
There is much more to an offer than the purchase price!

In addition to offer price, a seller is going to look for the following:

• Earnest Money - the more, the better. Your goal should be $1000 minimum with 1% or more making your offer very strong (more about earnest money later)
• Financing - a pre-approval from an established and known lender that is based on actual credit check and verification of income and assets
• Closing Date - try to find out the seller's preferred closing date and meet it if you can
• Contingencies - the fewer the better and those that you do include, write dates in the PA that say you'll satisfy them as soon as possible (inspection & mortgage underwriting are the main ones)
• Personal Property - try to include only those items they say they are including (don't write in the big screen TV if it isn't explicitly included in the home sale)

The bottom line with all this is good negotiating strategy. Think like the seller and meet their terms on as many points as possible. This may save you several thousand in a lower sale price.

Earnest Money - I promised I would touch on earnest money... Earnest money is money you put down on the home normally in the form of a personal check. The check is cashed only if your offer is accepted. It is then put into a trust account in your name and in the seller's name. The only times it is released to either party are spelled out in the PA and both parties must agree in writing to the release of the money.
It is normally used by the buyer as either:

1. Part of a downpayment
2. Closing Costs
3. It can be returned at the closing in the form of a check

The main or only time your earnest money is in jeapardy is if you as the buyer don't fulfill your contractual obligations as spelled out in the purchase agreement. Ask your Realtor about this to ensure you are absolutely clear on the risks!!!

Final Walk-Through
You'll want to take another look at your house before the closing to ensure:

• all required repairs have been made
• any damage - either new or previously not visible is found
• all items from the PA are still in the home (curtains, appliances, rhubarb, ...)
• no garbage was left behind (tires, chemicals, ...)
• the home is reasonably clean
• appliances, a/c, furnace and other items still work
• Bottom line - limit surprises when you move in!

Schedule the final walk-through for a time when the current owners are moved out and ideally only 1-2 days before the closing. Enough time to negotiate the correction of any discovered items before the closing.

Closing
The closing is when everyone signs the final paperwork. If you want to read (not paraphrase or speed read) each document, you'll likely want to talk with your closer or title agent about pre-signing or about meeting a few hours to a day ahead of time to read through the paperwork. You won't likely have enough time to read each form you sign at the closing in detail.
After all documents have been signed, the sellers will get their money and will give you the keys.
Other things to consider:

• Get any manuals for appliances, furnace, a/c, home warranties (i.e., new roof), ...
• Get garage door openers and garage door opener code
• Exchange phone numbers and ask if it's ok to call them with any questions
• Ask what to do with any mail that comes

Finally, enjoy your new home. Remember it won't be perfect but take it slow, one project at a time and it will become your home!