Christi Nelson's Lake Oroville Real Estate Blog

So your agent has shown you a bunch of  houses and you might be getting a little frustrated if you havent found the right one.  Be patient! Sometimes it takes a few showings to really fine tune what it is that you REALLY want. 

 Then, you finally find it! Let the flood of emotions and questions begin!

In my opinion, it is good idea to educate the buyer as to what the process is and what decisions we will have to be made when finally making the offer.  However there are still little things that will need to be addressed and especially if there are going to be multiple offers on the property.  Thats where you will need to really listen to what your Realtor advises you to do. They have the experience and negotiating skills that will put your offer in its strongest possible position.

Although there are many part to the purchase contract here are a couple examples of things to think about:

The  purchase price. What is the amount you really want to offer? This will usually be a number you come up with according to the sold comps your agent has provided to you. Keep in mind this is probably the toughest part. There are a couple of factors to consider when finalizing the price. Is the seller being asked to give a credit for your closing costs? Are you asking for the seller to pay for all the inspections? How long is your escrow period?  These are things that need to be considered and your agent  will help you fine tune the numbers to make it attractive to the seller.

Escrow Period- How long of an Escrow do you need? Generally the normal time period is 30-45 days. Its a good idea to check with your lender regarding the time period they may need to complete the loan process.

Inspections- What type of inspections do you want to do? What is customary? What do you want the seller to pay for and which ones will you as the buyer pay for?  Your agent will be able to advise you on what the different types of inspections you can do and the importance of them. Your lender may also require certain inspections depending on the type of loan you have.

Here is an example of what a Califonia Purchase contract will look like.

REO stands for real estate owned. This term is used when referring to a home that has gone through the foreclosure process, failed to find a buyer at the auction, and is now owned by the bank. One of the major benefits of buying a bank-owned REO property vs a Foreclosure is that buyers can purchase the home free of title liens and other claims. Lenders generally expunge all second and third liens, as wells as delinquent taxes, HOA and mechanics’ liens.  In addition, there are no tenants to deal with or evict and the property evaluation process can be done easily.

Making an Offer

Offers are usually FAXED to the bank by the listing agent. There is no formal presentation. It may take a few days to get an answer, so be patient. Keep in mind: nothing happens evenings and weekends (banks are closed)

Since there is no face-to-face presentation to the bank, provide the listing agent with a pre-qualification or better yet, a pre-approval letter when submitting an offer. Most times you will be required to go through a certain lender for that letter, and not doing so could cause you to lose the property. However you may choose any lender for the actual financing of the purchase, once you have an accepted offer.

Usually, if you didn’t offer full price, you can expect to get a counter offer from the bank. It will be the banks agreeable terms so read everything carefully as they only put what they WILL do and everything else in your offer is VOID. The counter offer can come with additional bank addendums to the contract and should be read carefully by both you and your real estate agent. Be prepared, these counter offers and/or addendums can be many pages long, and they are nothing to be afraid of. Just make sure you are agreeable to all the terms they have set.

Property Condition

Banks always want to sell a property in “as is” condition. Most will provide a Section 1 pest certification, but not unless you include it in your offer and negotiate the point. They will allow you to get all the inspections you want (at your expense), but they may not agree to do any repairs.Your offer should include an inspection contingency period that allows you to terminate the sale if the inspections reveal unanticipated damages that the bank will not correct. The banks usually give 7 to 10 days so know what inspections you want and order them as soon as you have an accepted offer.

I highly recommend everyone get a full home inspection! 

Even though you agreed to “as is,” always give the bank another opportunity to make repairs or give you a credit after you’ve completed your inspections. Sometimes they’ll re-negotiate to save the transaction instead of putting the property back on the market, but don’t take it for granted. They are required to get as much as they can for the property and may not do any repairs, willing to put it back on the market! Keep in mind it is all just a file to them. There is no personal connection as with a typical seller.