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#'s 1-3 really don't mean anything to the seller. In Georgia, the new Purchase & Sale agreement doesn't include a financing section - it is assumed the buyer already has financing or will secure it during their due diligence period. Now, being able to shorten that inspection/due diligence period can be helpful. There is no requirement for earnest money to have a binding contract, so all it does is demonstrate that the buyer is serious enough to write a big check.
The other items are more important to a mortgage lender.
#4 is always good. Another way to sweeten the deal is to allow the sellers to remain in the home for a period of 30-60 days or so after closing (provided your buyer can work with this). Sellers like having the flexibility of having the proceeds of the sale in the bank and plenty of time to go find their new home. If you do this, be sure to get a simple, one-page rental agreement signed at closing. This will ensure the buyer that they can get the seller out and it enables the seller to get renters insurance on the contents of their home until they move out.
In California,it is standard to get contingencies for financing. Even if the buyer is pre approved it takes some time to get that settled, i think with one home we bought we had 15 days to remove the contingency. That is pretty standard I believe. Also an inspection contingency..i would not write an offer without that..that protects the buyer if they find something horribly wrong with the home...
We are in Utah now, and when we bought this house we still had a home to sell in CA but we had no contingencies..kind of stupid now but we had several months before we closed escrow on this. Somehow it all worked out but I will never buy before I sell again!
If that doesn't give you an advantage in price , I don't know what will.
Sorry for the dumb question, but what does "no concessions" mean?
Quote:
Originally Posted by dogmom
Christeen, we are california natives, this is our first home out of state. We have always put down an earnest money deposit. The money is held in escrow until closing, the check should not even be cashed until offers are given and accepted. Depending on the price of the home, I would guess $1,000 - 10,000 would be appropriate. Hope that helps. If you are short on cash you might want to 'borrow' from family or something and put it in a savings account so you have it when you write a check with your offer. Like I said, just a thought. are you using an agent, they should be able to fill you in on whats the norm for your area....
Thanks for the explanation. Looks like I better get an agent soon to explain everything else to me.
#'s 1-3 really don't mean anything to the seller. In Georgia, the new Purchase & Sale agreement doesn't include a financing section - it is assumed the buyer already has financing or will secure it during their due diligence period. Now, being able to shorten that inspection/due diligence period can be helpful. There is no requirement for earnest money to have a binding contract, so all it does is demonstrate that the buyer is serious enough to write a big check.
The other items are more important to a mortgage lender.
#4 is always good. Another way to sweeten the deal is to allow the sellers to remain in the home for a period of 30-60 days or so after closing (provided your buyer can work with this). Sellers like having the flexibility of having the proceeds of the sale in the bank and plenty of time to go find their new home. If you do this, be sure to get a simple, one-page rental agreement signed at closing. This will ensure the buyer that they can get the seller out and it enables the seller to get renters insurance on the contents of their home until they move out.
I'm sorry but I don't want to buy a house and then rent it back to the previous owners for 2 months... In that case, I think the sellers are asking for way too much and will not attract many buyers.
Interesting how this thread points out the differences in different areas!
In New England these days, many sellers are definitely looking for buyers with solid pre-approvals, a significant deposit, and few or no concessions. Traditionally, 5% downpayment was the norm. Nowadays many sellers will accept less than 5%, but the smaller the downpayment, the less likely that a seller's going to give in to concessions involving either a lot of of money or a lot of time. Getting stuck in a bad offer can be worse than waiting a little longer for a good one - you lose both time and money as well as a good chunk of your marketing time, which in this market might mean your comps have already dropped by the time your house goes back on the market after coming out of a bad deal
A home inspection contingency is normal and is now often scheduled as quickly as possible after the offer is signed. The ability to get the loan is also a contingency, and points back to the seller's desire that the buyer have a solid pre-approval from a reputable lender.
Also, renting back to the seller is not normally done here. Nobody wants the liability and expense of buying a home plus renting their own place. Sellers are expected to be totally packed up and out of the house by closing time. This is another reason why it's so important not to have the deal go south at the closing table. The seller's already gone to the trouble and expense of moving out and finding other accomodations, so they definitely don't want to leave the closing table and move back into the house
I just accepted an offer on my house (FSBO! woo hoo! It wasn't really even on the market yet, I'd just posted it on CraigsList and Iggys to see if anyone actually looked on those sites; these buyers saw it on Iggys and called me for a showing. The price was right... as I learned here, that is THE most important thing).
Anyway, we had told the buyers that we will definitely be out by mid-July, but cannot leave sooner (we're moving long distance and travel plans are already made). It was THEIR suggestion that we close sooner and they rent back to us! Apparently they really like the house and don't want to risk the deal falling apart during a longer period between contract and closing. Works for us! And I guess since we've lived there for 14 years and haven't trashed the place, they feel they don't have to worry about us wrecking it, and since we're moving to Hawaii and have started packing and purchased our tickets already, there's little chance we'll overstay the rental period.
I do appreciate the suggestion about getting renter's insurance for that time period, it was something I hadn't yet thought of.
So with the right buyer and seller, a rent-back can work. Buyers should remember, though, that many sellers are very hesitant to do any kind of "pre-closing possession" (by the buyers); there's too much risk if the deal falls through, unless the sellers were already out and the house was going to sit vacant anyway. Also, some people feel that once the buyers are actually in, they are more likely to discover little things that they don't like about the house, and attempt to modify or get out of the contract.
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