Buying Real Estate

VI. REAL ESTATE OFFER

Writing an Offer to Purchase Greenville Real Estate

Once you find the home you want to buy, the next step is to write an offer ? which is not as easy as it sounds. Your offer is the first step toward negotiating a sales contract with the seller. Since this is just the beginning of negotiations, you should put yourself in the sellers shoes and imagine his or her reaction to everything you include. Your goal is to get what you want, and imagining the sellers reactions will help you attain that goal.

The offer is much more complicated than simply coming up with a price and saying, "This is what Ill pay." Because of the large dollar amounts involved, especially in todays litigious society, both you and the seller want to build in protections and contingencies to protect your investment and limit your risk.

In an offer to purchase Greenville real estate, you include not only the price you are willing to pay, but other details of the purchase as well. This includes how you intend to finance the home, your down payment, who pays what closing costs, what inspections are performed, timetables, whether personal property is included in the purchase, terms of cancellation, any repairs you want performed, which professional services will be used, when you get physical possession of the property, and how to settle disputes should they occur. It is certainly more involved than buying a car. And more important.

Buying a Greenville home is a major event for both the buyer and seller. It will affect your finances more than any other previous purchase or investment. The seller makes plans based on your offer that affect his finances, too. However, it is more important than just money. In the half-hour it takes to write an offer you are making decisions that affect how you live for the next several years, if not the rest of your life. The seller is going to review your offer carefully, because it also affects how he or she lives the rest of their life.

That sounds dramatic. It sounds like a clich. Every real estate book or article you read says the same thing.
They all say it because it is true.

Contingencies in a Real Estate Purchase Offer
In most Greenville real estate transactions there may be a slight challenge or two, but most things will go quite smoothly. However, you want to anticipate potential problems so that if something does go wrong, you can cancel the contract without penalty. These are called "contingencies" and you must be sure to include them when you offer to buy a home.

For example, some "move-up" buyers often agree to purchase a home before selling their previous home. Even if the home is already sold, it is probably a "pending sale" and has not closed. Therefore, you and your Lee Cunningham Team REMAX Agent should make closing your own sale a condition of your offer. If you do not include this as a contingency, you may find yourself making two mortgage payments instead of one.

There are other common contingencies you and your Lee Cunningham Team REMAX Agent should include in your offer. Since you probably need a mortgage to buy the home, a condition of your offer should be that you successfully obtain suitable financing. Another condition should be that the property appraises for at least what you agreed to pay for it. During the escrow period you are likely to require certain inspections, and another contingency should be that it pass those inspections.

Basically, contingencies protect you in case you cannot perform or choose not to perform on a promise to buy a home. If you cancel a contract without having built-in conditions and contingencies, you could find yourself forfeiting your earnest money deposit.
Or worse.

Condition of the Property
The last thing you want when you assume possession of your new Greenville home is to find it in a total mess. Therefore, you should make it clear in your offer that certain minimum standards are required. If you do not, you might find out the seller or neighbors have begun using the back yard as a trash dump, or something worse – and you would not be able to do anything about it.

Some of the requirements you might want to include in your offer are that the roof does not leak, the appliances work, the plumbing does not leak, that there are no broken or cracked windows, the yard has been kept up, and any debris has been cleared away. These requirements are checked out by a home inspector who makes sure the house is in sound structural condition and no repairs need to be made to the house.

Inspections You Should Require in Greenville SC
Besides appraisal and the termite inspection, you should also have a professional go through the house and seek out potential problems. Of course, you will have inspected the home, but you are not used to looking at some things that a professional will find nor are you usually aware of Greenville housing codes. Even if they are not things the seller is expected to repair, at least you will have foreknowledge of any potential problems.

The seller will want this inspection performed quickly, so that you can approve the results and move forward with your real estate purchase. Once you receive the real estate home inspection, you will want to allow yourself sufficient time to review and approve the report. The dates for having the inspection done and submitting the request for repairs then recieving an answer to your request are all detailed in the South Carolina sales contract, your Lee Cunningham Team REMAX agent will go over the contract with you throughly and recommend dates that can resonable be complied with. If you do not approve the report, you may negotiate with the sellers on which repairs should be performed and who should pay for those repairs. Some repairs the home inspector finds with need to be repaired by the seller because they are not up to Greenville County code. Other repairs that are not structural or Greenville County code related are negotiable, but the seller does not HAVE to do them. Otherwise, you can cancel the purchase without penalty, provided the seller does not do the REQUIRED repairs. You will not be allowed out of the contract if the seller only refuses to do requested repairs.

Allow a maximum of ten to fifteen days to receive the report and five days to review it. Getting a home inspection, negotiating repairs and having the repairs done is one of the most time consuming aspects of the closing process and can delay closing on time. Make sure to allow for plenty of time to get things done when setting your closing date.

Final Walk-Through Inspection in Greenville
Before closing, you will want to revisit your Greenville property to ensure it is in the condition you have required in your offer, and to inspect that any required repairs have been performed. You should do this no sooner than five days before you intend to close. In Greenville County the final walk through is generally made as close to closing as possible, preferably after the house sellers have moved out so that you can clearly see damage if there is any. You and your Cunningham Team REMAX Agent make sure this right to do a final inspection is included in your offer to purchase the home.

How Financing Details Affect Your Offer
Most buyers do not have enough cash available to buy a home in Greenville, so they need to obtain a home mortgage to finance the purchase. Since you will probably make your purchase contingent upon obtaining a home mortgage, the seller has the right to be informed of your financing plans in order to evaluate them. That is one of the major reasons that financing details are included in your offer.

Down Payment
As part of your offer, you will need to disclose the size of your down payment. Once again, this allows the home seller to evaluate your likelihood of obtaining a home loan. It is easier to get approved for a home mortgage when you make a larger down payment. The underwriting guidelines are less strict. If you need a home mortgage lender The Cunningham Team of REMAX can recommend several excellent lenders we work with constantly.

Home Mortgage Interest Rates
Another reason for including financing information in your offer is to protect yourself. If interest rates suddenly become volatile and rise quickly, as sometimes happens, you may looking at a mortgage payment much higher than you anticipated. By putting a maximum acceptable interest rate in the offer, you are protecting yourself from such an occurrence. Most Greenville lenders can "lock in" the interest rate on home loans, but the closing must take place a reasonable amount of time in the future. Generally lenders "lock in" interest rate for free for 30-45 days.

At the same time, the home seller will probably want to see that you have some flexibility in the financing terms you are willing to accept. If interest rates are currently at eight percent and you indicate this is the highest rate you will accept, you would be able to cancel the contract without penalty if interest rates rose past that point. The seller would suffer because they have lost valuable marketing time and may have made their own plans based on successfully closing the transaction.

Closing Costs and Financing Incentives in South Carolina
There may be times when, as part of your offer, you request the home seller to pay all or a portion of your closing costs, or provide some other financial incentive. One common request is asking the home seller to provide funds to temporarily buy down your interest rate for the first year or two. Such incentives can be especially effective if a buyer is tight on money or pushing their qualifying ratios to the limit.

Whenever you ask for incentives such as these, you will probably find the seller less willing to negotiate on price and they may even go up on their price. After all, what you are really asking for is to have the home seller to give you some money to help you buy their house. The end result is that, for a little relief in the beginning, you are willing to pay a little more in the long run.

Seller Financing in Greenville County
Another occasional request is to have the home seller "carry back" a second mortgage to help facilitate your purchase of their home. In cases when the home seller does not need all the proceeds from their sale in order to purchase their next home, this is an option. The advantage to the home buyer is that by combining your down payment and the second mortgage from the home seller, you may be able to avoid paying mortgage insurance and save yourself some money.

If such a carry-back is part of your offer, you should include the terms you wish to pay on such a second mortgage. Keep in mind that your first mortgage lender needs to know this information so they can underwrite your loan, and they have certain minimum requirements. The minimum term of the second mortgage can be five years. The minimum payment can be "interest only." Longer home mortgage terms and payments that also include principle are also acceptable.

Cash Offers in Greenville County
If you are one of those rare individuals making a cash offer to buy a home, it makes sense to provide some documentation with your offer that shows you have the funds available. A bank statement would be fine. If you have to liquidate stock or some other asset, your offer should give a timetable on when you will provide proof you have converted the asset to cash.

Making a cash offer greatly simplifies the closing process and ensures a speedy closing in Greenville.

Other Financing Details in Your Offer
Your offer for a Greenville home should also contain information on whether you are obtaining a fixed rate or an adjustable rate mortgage. It should also state whether you are obtaining conventional financing or obtaining a VA or FHA loan.

How FHA and VA Loans Affect Your Offer
Extra Costs to the Seller
If you are obtaining a VA or FHA loan in order to finance your purchase, you must include that information in your offer. This is because government loans place additional financial and performance obligations on the home seller.

Non-Allowable Fees
First, VA and FHA loans prohibit home buyers from paying certain types of fees that are often charged by mortgage lenders, escrow companies, settlement agents, and title companies. They are called "non-allowable" fees. They still get charged anyway, but as the home buyer, you are "not allowed" to pay them. The result is that the home seller ends up paying them instead of you.

Most of these "non-allowable" fees come from your home lender. By the time you are making an offer you should have already been pre-qualified by a home loan officer, so you or your real estate agent can ask how much the home  lenders non-allowable fees will be. Experienced Lee Cunningham Team REMAX agents also have an idea of what non-allowable fees will be charged by the escrow or settlement agent and the title insurance company. Since these are fees the home seller would not pay on an offer with conventional financing, this information must be included in your offer. You should also realize that since the home seller will be paying these additional fees, they may be a little less negotiable on the price.

VA and FHA Appraisals in South Carolina
Home appraisal inspections on FHA and VA loans are a little more detailed than on conventional loans (and more expensive). The appraisers are required to perform certain minimum inspections as well as evaluate the market value of the property. Although these inspections are not as detailed as a professional home inspection and should not be considered a substitute, sometimes repairs are required. These are additional costs the home seller would not be obligated to pay for someone obtaining conventional financing, so your offer should include a maximum figure for these repairs. Otherwise the home seller is signing the equivalent of a blank check, and they do not want to do that.
At the same time, whatever figure you put in will most likely affect the home seller´s willingness to negotiate on price. If you put $500 as an estimate, the home seller may be $500 less negotiable on their price. If no repairs are required, you may have been able to get the house for $500 less than what you and the home seller agreed on as the price. The solution is to add a clause to your offer that goes something like this. "If required repairs cost less than the maximum amount allowed, the excess will be credited toward home buyer´s closing costs."

Selecting Service Providers in Greenville, SC
You Have the Choice of Providers
Buying a home does not occur in a vacuum, involving only you and the home seller. There are all kinds of people and services involved behind the scenes to make it happen. As the buyer you have the right to choose your service providers since you will be paying for there services. When you make your offer, you should request your favorites for these services. The Cunningham Team of REMAX can recommend tried and true service providers if you are unfamiliar with Greenville service providers.

Escrow and Settlement Closing in Greenville, SC
in Greenville County and South Carolina the terms escrow and settlement are not used in the same way most of the country might be familiar with. For example, in most of the U.S. you are going to need an escrow or settlement company to act as an "independent third party" between you and the seller. Without having a third party involved, how do you know that when you fork over the money, you are going to get the deed? This is the type of service provided by escrow and settlement. They will hold your deposit and coordinate much of the activity that goes on during the escrow period. In Greenville the escrow is the moneys the home buyer turns over to show the home seller they are serious about purchasing. The Escrow check is held by the brokerage company of the buyer's agent, if you use our services the money would be held by REMAX realty professionals brokerage. The settlement is called the closing in Greenville, SC and it is handled by an attorney of the home buyers choice.

The attorneys fee are part of the closing and can be included in the closing costs. Your choice of Greenville attorneys should be part of the offer. Since you do not buy a home every other week or so, you are probably unfamiliar with companies that provide this service. If the home buyer is not familiar with Greenville attorneys The Cunningham Team of REMAX is and will gladly recommend some good ones. You have the authority to accept this recommendation and include it in your offer, or make your own choice.

Keep in mind that the home seller in Greenville will not have a choice in this matter.

Title Insurance
Title insurance is important because, by providing you with a Policy, they insure that you have clear title to the property. If there are any problems later, you can always go back to the title insurance company and have them clear it up. Since it is customary for the home buyer to pay for the owners policy, they choose which company is used.
Most lenders require title insurance. The lenders policy insures your mortgage lender that there are no liens or judgments against the property and that the home mortgage will be in first position. In other words, should you sell the property or refinance it, their mortgage gets paid first, before any other claims against the property.

If you are paying cash having title insurance is not required, but recommended by The Cunningham Team of REMAX realty professionals.

Termite and Pest Inspection in Greenville County
In Greenville as part of your offer, your bank and/or you may require a termite and pest inspection. In Greenville County the letter certifying no termite damage is called a CL-100. The Termite company not only inspects for termite damage and pest infestations, but also inspects for dry rot and water damage, among other things. The company that performs the inspection is important to you as a home buyer, because you want to be sure they do a good job. In Greenville it is important to the home seller because while the buyer pays for the inspection the seller has to fix anything the inspector finds that is structurally damaging to the house as well as get rid of any termites before the mortgage company will give financing.

You should determine which company you want to perform this inspection and make it a part of your offer. If you do not know which company to hire, The Cunningham Team of REMAX will make a recommendation from a list of vendors we regularly use and trust.

Home Inspection in Greenville County
In Greenville as part of your offer, your bank and/or you may require a home inspection. In Greenville County the This is a very good ideal even in new home construction because some times the builders do not build up to Greenville County code. The Home Inspection company not only inspects for structural damage, but also inspects for dry rot and water damage, among other things. The company that performs the inspection is important to you as a home buyer, because you want to be sure they catch anything that could cause you problems later. In Greenivlle It is important to the home seller because while the buyer pays for the inspection the seller has to fix anything the inspector finds that is structurally damaging to the house.

You should determine which company you want to perform this inspection and make it a part of your offer. If you do not know which company to hire, The Cunningham Team of REMAX will make a recommendation from a list of vendors we regularly use and trust.

Radon Inspections in Greenville County
In Greenville as part of your offer, you may require a radon inspection. In Greenville County certain subdivisions tend to have high levels of radon. The radon company will set out a test to make sure the radon coming from the ground into the house is not at damaging levels. In Greenivlle It is important to the home seller because while the buyer pays for the inspection the seller must make the radon levels within acceptable levels before the house can be sold.

You should determine which company you want to perform this inspection and make it a part of your offer. If you do not know which company to hire, The Cunningham Team of REMAX will make a recommendation from a list of vendors we regularly use and trust.

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