What Are Other Important Terms of the Contact?
Category:
Writing a Winning Offer
- Earnest Money Deposit: We recommend minimum 1% of the purchase price or the seller will not consider your offer serious. The more you put here, the more you are telling the seller that you are committing to your contract with them.
- Time for Acceptance: Is it fair and reasonable to the seller? Asking for less than one business day is likely going to be an annoyance to the seller. Give them at least 24 hours to review and discuss your offer. Up to 36 hours is good. Exception: The seller has indicated a day and time that all offers will be considered. It’s important to at least consider respecting that until your offers is so juicy, it would be hard to pass up.
- Financing, Mortgage Loan or Cash: Cash is always best as it reduces the number of contingencies. However, there isn’t much if any discount for paying cash. It’s all cash to the seller at closing.
- Types of Mortgage Loans: A conventional loan with 20% or more down is best. It’s unfortunate that FHA and VA loans go to the back of the line. They add extra contingencies to the contract, obligations to the buyer, and have a solid, built-in appraisal contingency.
- Inspection Period: Seven to ten days is the typical inspection period. Asking for more is just asking for your offer to removed from contention.
- Closing Date: Does that coincide with their needs?
- Additional Conditions: Adding extra conditions like a seller paid home warrantee, buyer closing costs paid for by the seller, or “home must appraise” are red flags to sellers. Offers without these add-ons will more likely be accepted.