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Writing the Offer - Financial Considerations
It is standard practice to make a purchase offer contingent upon obtaining a mortgage. Because of this contingency, the seller will want the details of your financing plan included in the offer.
While all written offers must be presented to the Seller, more and more, Sellers are asking for a pre-approval letter from your Lender before they respond to your offer. To avoid a possible delay in receiving a response to your offer, be sure to have your pre-approval letter ready. I'll help you in this area if you have any questions.
It is critical to include any items that you want the other party to do, in the written offer. If you want the Seller to fix that broken window, repair the hole in the wall or replace the old, but operable dishwasher, it must be in the offer. On the other hand, the more simple that we can make your offer, the better it's chance of being accepted at the price you want.
Rather than make a long list or requirements, if you could make some of those repairs yourself, you might get a better price on the house. Put yourself in the Sellers position, if two offers came along that would net you the same amount of money, which would you accept, the complicated one, or the simple one?
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Down Payment
In the purchase offer, we will include the down payment amount you will apply toward the purchase. This will give the seller further evidence of your qualifications to secure a mortgage.
Interest Rate
Within the purchase offer, we will provide a safeguard against any dramatic change in interest rates between when the offer is made and when the loan is closed. The offer will not only be contingent upon qualifying for a mortgage, it will also be contingent upon an interest rate within a certain range.
Shopping for Interest Rates >
Seller Assistance
If the house you select is at the top-end of your budget range, we may want to include a request for seller assistance to pay a portion of the closing costs traditionally paid by the buyer or to help "buy-down" your interest rate. Other seller assistance may include having the seller "carry back" a second mortgage to cover your down payment or even 100% seller financing.
With any of these seller assistance options, you can expect to pay a higher purchase price than if you had handled the financing through a traditional mortgage lender, or had cash available to pay those fees and costs yourself. Still, it can make the difference between being a home owner or not and often it is well worth the additional costs. |
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