Buying Your Home - Making an Offer
What is the difference between list and sales
prices? The list price is how much a house is advertised for and is
usually an estimate of what a seller would like to receive for the property.
The sales price is the amount a property actually sells for. It may be the same
as the listing price, or higher or lower, depending on how accurately the
property was originally priced and on market conditions. If you are a seller,
you may need to adjust the listing price if there have been no offers within the
first few months of the property's listing period.
What is the difference between list price, sales price and appraised value? The list price is a seller's advertised price, a figure that usually is only a rough estimate of what the seller wants to get. Sellers can price high, low or close to what they hope to get. To judge whether the list price is a fair one, be sure to consult comparable sales prices in the area. The sales price is the amount of money a buyer would pay for a property. The appraisal value which is required by lenders is a certified appraiser's estimate of the worth of a property, and is based on comparable sales, the condition of the property and numerous other factors.
Is a low offer a good idea? A low-ball offer is a term used to describe an offer on a house that is substantially less than the asking price. While your low offer in a normal market might be rejected immediately, in a buyer's market a motivated seller will either accept or make a counteroffer. While any offer can be presented, a low-ball offer can sour a prospective sale and discourage the seller from negotiating at all. Unless the house is very overpriced, the offer will probably be rejected. You should always do your homework about comparable prices in the neighborhood before making any offer. It may be helpful to know something about the seller's motivation. A lower price with a speedy escrow, for example, may motivate a seller who must move, has another house under contract, or must sell quickly for other reasons.
contingencies should be put in an offer? Most offers include two standard
contingencies: a financing contingency, which makes the sale dependent on the
buyers' ability to obtain a loan commitment from a lender, and an inspection
contingency, which allows buyers to have professionals inspect the property to
their satisfaction. A buyer could forfeit his or her deposit under certain
circumstances, such as backing out of the deal for a reason not stipulated in
the contract. The purchase contract must include the seller's responsibilities,
such things as passing clear title, maintaining the property in its present
condition until closing and making any agreed-upon repairs to the
Who gets the furnishings when a home is sold? It depends. Fixtures are any kind of personal property that is permanently attached to a house (such as drapery rods, built-in bookcases, tacked-down carpeting or a furnace) and automatically stay with the house unless specified otherwise in the sales contract. Anything that is not nailed down is negotiable. This most often involves appliances that are not built in (washer, dryer, refrigerator, for example), although some sellers will be interested in negotiating for other items, such as a piano or patio furniture.
Whose obligation is it to disclose pertinent information about a
property? In most states, it is the seller, but obligations to disclose
information about a property vary. Under the strictest laws, you and your agent are required to disclose all facts materially affecting the
value or desirability of the property which are known or accessible only to you.
This might include: homeowners association dues; whether or not work done on the
house meets local building codes and permits requirements; the presence of any
neighborhood nuisances or noises which a prospective buyer might not notice,
such as a dog that barks every night or poor TV reception; any death within
three years on the property; and any restrictions on the use of the property,
such as zoning ordinances or association rules. Check the local and state disclosure rules prior to a home purchase.
How do you determine the value of a troubled property? Buyers considering a foreclosure property should obtain as much information as possible from the lender, including the range of bids expected. It also is important to examine the property. If you are unable to see the interior of a foreclosure property, check with surrounding neighbors about the property's condition. Be sure to make a price/value comparison through researching comparable properties recorded at local county recorder's and assessor's offices, or through internet sites specializing in property records.
What are some tips on negotiation? The more you know about a seller's motivation, the stronger a negotiating position you are in. For example, sellers who must move quickly due to a job transfer may be amenable to a lower price with a speedy escrow. Other motivated sellers include people going through personal or financial hardships or who have already purchased another home. Remember, that the listing price is what the seller would like to receive but is not necessarily what they will accept. Before making an offer, check the recent sales prices of comparable homes in the neighborhood to see how the seller's asking price compares.
Do I need an attorney when I buy a house? In some states, you do need an attorney to complete a real estate transaction, but in others you do not. Most home buyers are capable of handling real estate purchase contracts with the services of a qualified real estate agent as long as they make certain they read the fine print and understand all the terms of the contract. In particular, you should be clear on the terms of any contingency clauses that will allow cancellation of the contract. If you have any questions, it may be advisable to consult an attorney to avoid future legal issues. In looking for an attorney, ask friends for recommendations or ask your real estate agent for recommendations. Check on their experience and fees. In general, more experienced attorneys will cost more, but real estate fees as a rule are small relative to the cost of the property you are buying.