Ready to Make an Offer?
When you’re ready to make an offer on a home there’s a lot of work to do. Below you’ll find an overview of what you need to know and the documents that you should include in your offer.
Your agent should reach out to the seller’s agent for information about the status of the property including whether or not there are other offers on the property and any specific items that may be of importance to the seller.
As a general rule, if a property is new to market or has recently reduced the asking price significantly then you should expect that the home will sell for close to the asking price. If there are other offers on the home then it’s extremely likely that the home will sell for the asking price or more.
Before you decide to make an offer, visit the Megan’s Law website for information about registered sex offenders that may live nearby.
Estimate of Value
Look at the most similar recently sold homes in the neighborhood and the state of the market to determine an estimate of value for the home. We’ll use this information to determine your offer price. The asking price may be below, at, or above the estimated value.
The following paperwork will be included with most offers. Here are brief summaries of the documents that we’ll use . . .
Consumer Notice & Buyer Agency Agreement
The Consumer Notice explains the various types of representation allowed in PA including Buyer Agency, Seller Agency, and Dual Agency.
The Buyer Agency Agreement makes me your real estate agent and details the terms of our Agreement. The Buyer Agency Agreement will typically be for a term of 6 months. The costs will be 2.5% of the sale price. This fee is typically paid by the seller and their broker. There will be a $250 fee that you’ll pay at settlement which is included to cover administrative costs associated with the property purchase.
Your lender will provide a Mortgage Pre-Approval Letter that shows the amount of the offer price or greater, the type of loan, and the estimated interest rate. If you haven’t yet spoken with a lender for mortgage pre-approval you should do that right away as it can take several days or more to get the letter and you won’t want to miss out on a great home because we’re waiting on the letter. You can find my list of trusted lenders here.
Buyer’s Financial Information
This document will detail your financial information including your income, assets, and debts. You will need to show liquid assets, ie, cash, available to cover your closing costs and down payment that will be due at settlement. For example, if your down payment and closing costs are estimated at $4o,000 you’ll need to show that you have a minimum of $40,000 available.
Estimated Closing Costs
I’ll provide you with an estimate of your closing costs and monthly payments. The estimate will include typical inspection costs, your down payment, title insurance, mortgage fees, and closing fees. Your monthly payments will be estimated at .5% more than the interest rate provided by your lender to allow for fluctuations in the market between now and the time that your interest rate is locked in (interest rates can’t be locked until you have a completed purchase contract with the seller).
Note: Your lender is the most accurate source of information on costs and they may have information that I won’t have access to.
Deposit Money Notice to Buyer
The Deposit Money Notice states that your earnest deposit, money paid prior to the settlement that will be put toward your down payment and closing costs, will be deposited into a licensed real estate broker’s escrow account.
Seller’s Property Disclosure
Most sellers are required to disclose the condition of the home to their knowledge. The Seller’s Property Disclosure is used to provide this information.
The Lead-Paint Addendum notes whether or not the seller has tested for lead-paint in the home and whether or not they have a written record of any lead-paint tests. This is only used for homes built prior to 1978.
Social Security Number Authorization
The Social Security Number Authorization provides the broker and title company with authorization to check your social security for information such as outstanding child support that would need to be cleared prior to making a home purchase.
Agreement of Sale
The Agreement of Sale is the main offer. If signed as-is by the seller, or signed after negotiated changes are made, it will become the purchase contract between you and the seller. For information on what’s included in the Agreement of Sale, click here.