We will review the contents of the offer with you. There are a few terms we want to pay specific attention to in the sales contract:
- Price: What did you list the home for, what is the lowest price you’d accept, where does this fall on that scale?
- Closing date: In this market, closing is typically 30-45 days from the date of ratification. Where does the date on the offer fall in this timeline? Sometimes buyers will need more time for special loan programs, for giving notice to a landlord, or to close on their own home if they are selling.
- Earnest Money Deposit (EMD): How much is the buyer putting down for their EMD? For homes under a million dollars, the EMD is usually one percent of the sales price. If the buyer is putting less than that down, they may be using a special loan program such as FHA or VA. This may show financial instability, or that they are at the upper edge of the budget. Ideally, we look for 1% or more.
- Down Payment: With a variety of loan programs available, the down payment could be any amount from 0% upwards. We like to see 5% or more, unless they are doing a VA or FHA loan.
- Seller Subsidy: Is the buyer asking you to pay a portion of the closing costs? Did you offer a buyer credit incentive? Keep in mind that amount they are asking for will come from your net proceeds. Example, if they ask for $9K in closing costs, and offered $500K, we consider this an offer for $491K.
- Home warranty: Is the buyer asking you to pay for a home warranty? Depending on the size and home warranty provider, this can range from $400-$800 and deducted from your proceeds at closing.
- Personal property: Have the buyers asked for the inclusion of personal property? Often this will be outdoor equipment or a media system. You do NOT have to agree to this if you plan to take the items to your next home.
- Contingencies: Have they put any contingencies? Such as needing to close on their home first?
- Additional Riders or Addendums: These can be the things that don’t fit into any other categories
We are your team in this process, so if at any point reviewing an offer you have a question or concern, we are right here to help you in understanding and making an education choice. If the conditions of the offer are acceptable, then we accept. If they are close, but not quite right, we can counter their offer. If the terms are completely out of line, we can walk away and reject it. If you choose to counter, you must realize negotiations can move at different rates. It’s normal to feel impatient at this stage, but you have expert negotiators on your side.
Definitions of terms used above:
Closing Costs– The expenses incurred in obtaining the property and transferring title to the new owner. This may include but is not limited to attorney’s fees, points, title charges, credit report fee, document preparation fee, mortgage insurance premium, inspections, survey, appraisals, prepayments for property taxes, deed recording fee, and homeowners insurance.
Contingency – A condition that must be met before a contract is legally binding, or before a sale is to be completed. The contingency provides an out or an escape from performing if the condition is not met.
Down Payment- The difference, in dollar amount, between the purchase price and the loan amount.
Earnest Money Deposit– Funds given by the buyer and held in an escrow account until the real estate closing. In some cases, these funds are refundable if the loan fails to close, but if the loan does close, the purchaser is given credit at closing for the earnest money.
Home Warranty – An insurance policy covering specific future repairs, should they become necessary, for a specific time period. These are often provided by the seller or builder as a condition of sale.
Ratification – The action of signing or giving formal consent to a contract or agreement, making it officially valid.
Seller Subsidy – A credit from the seller to offset some of these costs.
Questions? Please give us a call at 703-539-2053 or email us at [email protected].
Step 1: Hire a Realtor
Step 3: Declutter and Stage!
Step 4: Conduct a Pre-Listing Inspection
Step 5: Repairs
Step 6: Deep Clean
Step 7: Professional Photography
Step 8: We’ll Pre-Market Your Home
Step 9: We’re live on MLS, now what?
Step 11: Time for Showings
Step 12: Week One on the Market
Step 13: You’ve got your first offer!
Step 15: Offer was accepted! Congrats!
Step 16: The Home Inspection Period
Step 18: Select a Title Company
Step 19: Scheduling closing date
Step 20: Hire Movers, Start packing!
Step 21: Utilities Transfer
Step 22: Home Owner’s Insurance Cancelation
Step 23: Hire a Cleaning Service
Step 24: Buyer’s Mortgage Approval
Step 25: Final Walkthrough
Step 26: It’s Closing Time!
Step 27: Review Us
About the Author: The above article was written by Abraham Walker, Your Alexandria Virginia Real Estate Agent, helping clients market their homes to achieve high sales with a quick closing time is my main priority.
He’s the co-founder of Ask A Walker and can be found on YouTube, Facebook, and HERE on this blog.
Abraham can be reached via email at [email protected] or by phone at (703)539-2053.
He’s happy to answer all your real estate questions.
Thinking of selling your home? Check out my 20+ step process to selling your home. Or contact me now to start the home selling process. Same day appointments are available on a case by case basis.
Your Alexandria, VA Realtor, Abraham Walker, helps people sell and buy real estate in the following Northern Virginia area cities & neighborhoods: Kingstowne, Island Creek, Cameron Station, Overlook, Alexandria, Old Town, Belle Haven, Fort Hunt, Mount Vernon, Springfield, West Springfield, Burke, Lorton, Woodbridge, Lake Ridge, Manassas, Annandale, Fairfax, Arlington, McLean, Reston, Herndon and of course Vienna.