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Okay, so you’ve looked and looked – and you’ve found the place that you want to buy! What happens next? First, have your agents pull COMPS. COMPS are comparable properties that have sold in the area recently that will help you determine the value of the home that you want to buy. Typically we start with homes that have sold in the last three months that are within a half mile radius that are “comparable”. If there aren’t at least three comparable properties within those parameters, we expand the search – going out to a mile and back six months…. And so on. Your agent can be an invaluable help in determining a fair price for the home and what you should offer.
Once you’ve determined what you’d like to offer, it’s time to put TOGETHER the offer. We do this by filling out the GAR (Georgia Association of Realtors) Form – there’s one for single family homes, and a different one for condos. Here are the elements of the offer:
- Purchase price you’re offering;
- Amount of earnest money you’re putting up – standard in Georgia is to put up at least one percent of the purchase price, so for a $500,000 property you’d put up $5,000 in earnest money);
- Amount of closing costs you’re asking the seller to pay:
- This must be a SPECIFIC amount. You can’t just ask the seller to pay “all” closing costs, or 50% of closing costs – you have to ask for a specific amount
- Make sure the amount you are asking the seller to pay is not MORE than your actual closing costs. Your lender can help you determine this
- What DATE you want to close. Typically you’ll need at least three weeks from making the offer if you are getting a loan (not paying cash) for the lender to underwrite your loan;
- Due diligence period – this should be seven to ten days, unless there is a good reason to ask for more (say there’s evidence of structural problems, that sort of thing). During the due diligence period you can terminate for any reason or no reason at all, and still get your earnest money refunded;
- The closing attorneys you’d like to use; your Realtor can make recommendations for this – it needs to be an attorney who regularly does closings and who in on your Lender’s approved list;
In the stipulations, here are some things (among many) you may ask for (BUT keep in mind, that you might not want to clutter up your offer with lots of ancillary requests, particularly if the offer is a lowball offer):
- Seller to provide a one year termite bond for Buyer
- Seller to provide a one year home warranty for Buyer
- Seller to provide a survey of the property for Buyer
- Seller to have the property professionally cleaned prior to closing
- There may be certain items in the property that aren’t listed on the Seller’s Disclosure as staying with the property, but which you want to remain with the property, such as:
- A porch swing
- A gas grill
- A piece of furniture that is custom fit to a certain spot
- Chandeliers, if not already being left; etc.
In addition, there are often EXHIBITS to the contract that are necessary:
- Financing contingency – if you are paying for the property with a LOAN, you want to be sure that you can obtain financing
- Appraisal contingency – this assures that the property must appraise for the amount you are paying, or you are able to get out of the contract
- Lead Based Paint exhibit – if the property was built prior to 1978, you need an exhibit explaining that there may be lead based paint in the property
- Plumbing disclosure – in some counties, like Dekalb, the county requires that you have LOW FLOW fixtures in order to obtain water service. In those counties, there should be a plumbing disclosure attached to the contract
- Seller’s Property Disclosure – this is attached to and becomes a part of the contract
- Condominium Disclosure Exhibit – sets forth the monthly fees for the condo, etc.
Your Realtor will need your signature on the offer and exhibits, will need the earnest money check IN HAND (the Broker will deposit the check when you’ve reached binding agreement – otherwise, it will be torn up or returned to you) and a prequalification from your lender.
Now, the game begins! Unless you’ve made a very good offer, chances are that the Seller will counteroffer, and the counteroffers will go back and forth until the parties reach agreement. At this point, it is INSPECTION TIME – the subject for another blog post in the near future!!!