| Newer Post | home | Older Post |
 |
 |
Ideally, We Should Talk About Potential Contingencies Well Before Making An Offer On A House |
|
 In a fast moving housing market, it's important to be ready to make an offer quickly after seeing a house that you like. But... making an offer includes a variety of other decisions that may require more a bit of thought and planning. FINANCING This one is perhaps the most straightforward. By the time you are going to view a house for sale you should have already talked to a lender and have a pre-qualification or pre-approval letter in hand. You don't want to be in a situation where you like a house but haven't even talked to a lender yet to be able to have a letter documenting your financial ability to purchase the house. A seller in this market (and in most markets) will not seriously entertain an offer with a financing contingency if a lender letter is not included. Ideally, you should know how high you can go on price... and have a sense of what the monthly payment will be at a few different price points. This will allow you to thoughtfully consider the price that you might want to offer when we are viewing a house. INSPECTION Many offers are made without inspection contingencies these days. Are you willing to do so? It's fine to include an inspection contingency in your offer, but you should know that doing so will make it less competitive if there are other offers on the house that may not have inspection contingencies. You should think this through (whether you are comfortable buying without a home inspection) before going to see houses... even if you plan to make the decision on whether to conduct an inspection on a property by property basis related to the agent and condition of the house. APPRAISAL Most offers used to include appraisal contingencies, allowing the buyer the opportunity to try to renegotiate the sales price if the appraisal came in below the contract price. These days that is much less common... and some buyers are specifically indicating that they can and will proceed with the purchase at the contract price regardless of the appraised value... or are stating in an offer that they are willing to proceed at the contract price so long as the appraised value is within $___ of the contract price, etc. Are you comfortable paying a bit above the appraised value in order to secure a contract on a house? Are you willing to pay a contract price regardless of the appraised value? These are, again, questions we should discuss generally even before we think about them specifically related to a house we are viewing. Furthermore, you should understand (through a conversation with your lender) how a low appraisal will or will not affect your loan terms related to the LTV (loan to value) ratio, mortgage interest rate, funds required for closing, etc. Yes, we will talk about all of these potential contingencies when we are considering an offer on a specific house... but it can be helpful to think about them generally, and talk to me about them, ahead of time so that you can give some thought to what you are and are not willing to do in the current competitive market. Recent Articles:
| |
 |
 |
| Newer Post | home | Older Post |
Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
Licensed in the
Commonwealth of Virginia
Home Search
Housing Market Report
Harrisonburg Townhouses
Walk Through This Home
Investment Properties
Harrisonburg Foreclosures
Property Transfers
New Listings
