Fabulous! You’ve found the perfect home and want to put in an offer. Before I can put an offer in on a home, there are a few things I need you from you:
Full legal name: Please email me the full legal name of anyone who will be on the contract as well as their phone number and email address. The legal name has to match what is on your driver’s license as you’ll need to show your driver’s license or passport at closing and this name needs to match what is on the contract. It will also be the name used on all mortgage documents.
Initial offer price: What initial price do you want to offer for the home? Let’s have a discussion about the sale to list price in the neighborhood if we haven’t already as that will tell you a lot about whether you should expect to pay below asking price, asking price, or above asking price based on today’s market. I will also email you comparable properties to review.
Your walk away price: Don’t expect to pay your initial offer price as it’s rare for a seller to accept your initial offer without some negotiating back and forth. That’s why it’s called an initial offer. In addition to deciding what offer you want to put in to start, you need to decide now how much you’re willing to pay for this property and what your walk away price is before things get heated and emotional.
Closing date: Typically, in the DC area, closing takes place around 30 days from contract acceptance. Closings can only take place Mon – Fri; they cannot take place on weekends or bank holidays when the banks are closed.
Sometimes you can ask for a longer closing date (45-90 days) depending on the seller’s needs, but don’t expect it to be granted. Therefore, if you want to move around July 1, plan on putting in offers May 10 – 15. While some local lenders I use can do closings quicker (usually 21 days is the fastest a closing can be done with a mortgage), most lenders can’t close that fast and need 30 days. If you want to close faster than 30 days please let me know as I’ll need to direct you particular lenders in town who are capable of closing quickly.
If you’re not getting a loan and are paying 100% cash you can close as quickly as the title search comes back, typically, 14 days.
Before putting in an offer, please email me what exact date you want to close on the home (remember it has to be a Mon – Fri). I don’t recommend closing on a Monday as Monday closings increase your chances of last-minute issues. Usually we cannot specify a specific time for the closing as that depends on when the title company is available so plan accordingly. Closings can take place anytime from 9am – 4pm and usually take an hour. If you cannot attend closing, I need to know that 2-3 weeks in advance so I can ask the lender to approve a Power of Attorney so a family member can sign for you or arrange for a mobile notary to execute documents.
Earnest money: How much earnest money are you comfortable putting down on this property? Typically, contracts in the DC area look for 5-10% of the purchase price as earnest money.
This earnest money is due to the title company by the date specified in the contract, usually, I put 3-5 days after ratification. This money is refundable if you do an inspection and decide to walk away from the contract based on the results.
The earnest money is part of your down payment. Therefore, if you’re planning to pay $40,000 for a down payment and you’re paying $15,000 in total earnest money then at closing you would owe an additional $25,000 for the remainder of the down payment since you already paid $15,000 up front.
Down payment: For the contract, we need to know how much you’re going to put down for your down payment.
Closing cost credits: Do you want to ask the sellers to pay any of your closing costs? Generally, the sellers pay their closing costs and the buyers pay their own closings costs, however, we can ask the sellers to pay some of your closing costs on top of theirs, if needed.
Contingencies: Any other contingencies we need to be aware of? Do you need to sell your current home before we can buy this home?
Lastly, buyers sometimes want to know what happens if the contract is accepted and they have a change of heart or the inspection reveals a huge problem. Read here for information on getting out of a signed contract.
Want to review the contract in advance? Let me know and I will send you a draft copy.
Once we’ve talked through the above and you’ve emailed me your answers, i’ll write the contract and have you sign it via a program called DigiSign. The program is pretty easy to use but let me know if you need assistance. I will then submit it to the seller’s agent. While negotiations sometimes go quickly, be prepared that it often takes 2-4 days to negotiate the purchase price and terms of the contract. Every seller is different and some people can make decisions quickly whereas others need time to think things through. Patience is the name of the game once an offer has been submitted as we don’t want to look too eager as it weakens our negotiating position!