Making An Offer

Congratulations! You’ve found the Redlands home of your dreams and now you’re ready to make an offer on it. As your Redlands area experts, looking out for your best interest, we will help you make an offer that will get you the best possible terms.

What is the Purchase Agreement?
The Purchase Agreement is a written document in which the purchaser agrees to buy certain real estate and the seller agrees to sell under stated terms and conditions. It can also be called a sales contract, earnest money contract, or agreement for sale.

How much do I offer?
As your agent, we will help you do some prior research about the current market. We will help you determine how much similar homes in the area are selling for. Then you will need to consider three factors when deciding how much to offer:

1. The asking price
2. What you can afford
3. The prices for comparable homes in the area

How did the sellers come up with their price?
The seller’s asking price is really only a rough estimate of what the seller wants to receive. Most likely, they have requested a Comparative Market Analysis (CMA) to get a good idea of what similar homes are selling for in their area. Remember, this is only a guide and typically the price is not “set in stone.” We can help you come up with a realistic offer and negotiate other conditions you may want to include.

How much can I afford?
How much you can afford to pay for the home depends on how much your lender is willing to loan you. To make this decision, they take several factors into consideration to determine how much you can borrow. These factors include your credit history, your debt-to-income ratio, your credit worthiness, etc.

There are many advantages to working with a reliable, professional lender. They include:

• The ability to find the right loan at competitive prices. They can shop for the best loan and the best possible price. This allows the borrower the freedom to select the loan best suited for his needs at the best pricing without having to shop all over town.
• Efficient follow-up and teamwork. Once the transaction has been negotiated, the lender works hand in hand with the other support team members in order to make sure that the loan is approved and funded in a timely manner. Locating and handling any unforeseen situations before they become a problem, and keeping you informed along the way of all-important details.

A good lender will handle potential buyers with care and confidentiality. We will direct you to qualified, knowledgeable lenders who can provide the best possible mortgage services to you.

What is escrow?
Escrow means “neutral protection” for all parties involved in the transaction – the seller, the lender and the buyer. So that all parties involved in the transfer of real property are protected, they are serviced by an impartial third party. This neutral third party acts as an intermediary between the buyer and seller, and also collects and remits funds as instructed. Buyer’s funds are deposited with the escrow company that then remits to the seller on the buyer’s behalf.

Banks and title companies, as well as independent escrow firms licensed by the state of California, perform escrows in California. When considering an escrow company, look for one that clearly defines its services and lists all fees and charges “up front.” We will recommend escrow companies that we’ve worked with for many years.

Do I really need title insurance?
Title insurance protection gives a homeowner peace of mind by protecting the security of the home and the safety of the investment.

There are two main categories of risk in regard to the legal title of a property. These risks include hidden hazards – which cannot be detected in the examination of title – and human errors, which will always be with us. Examples of hidden hazards include forgery, incompetence of grantor or mortgagor, unknown heirs, fraud, impersonation, etc.

Initially, the title company will search and examine the public land records to investigate information surrounding title to the property. They want to be sure there is no lien on the title that could interfere with your ownership at any time in the future.

Know the market
Is the current real estate market hot or cold? Is it a Buyers, Sellers or Neutral market? Knowing these things will work in your favor because you will know if you need to offer a little more than the asking price (in a sellers market) or a little less (in a buyers market). As your local real estate experts, we will advise you on market conditions and how they impact your offer.

Find out why they are selling
If possible, it would be helpful to know why the owners are selling their home. You may be able to use this information to your advantage. If it’s been on the market for quite a while, they might be more motivated to sell at a reduced price. If they’re relocating, they might be willing to take less to get it sold quickly.

Let us help you develop a bidding strategy
In a sellers market, buyers might have to bid against other buyers for a home. If you find that other prospective buyers are interested in the same house, developing a bidding strategy could make you a winner. To start, set a limit on how much you’re willing to overbid on a home. While there are no guarantees, you could also write a letter to the seller to accompany your offer telling them about you and your family and explaining how much you want the home and your plans for it. This might provide enough incentive for the owners to accept your offer over any others.

Adding contingencies to your offerYou may want to add contingencies to your offer such as qualifying for financing, or based on the inspection report, or contingent on the sale of your existing home. Keep in mind though, the more contingencies you have, the less likely the seller will be to accept your offer.

What is a counteroffer?
Often, a seller will respond to an offer with a counteroffer. This counteroffer may include certain changes to the terms. Most counteroffers propose changes in the following areas:

• Price
• Closing date/occupancy date
• Inspection time

You can accept, reject or counter the counteroffer and the negotiations will continue until both sides reach an agreement. A contract is written when one party accepts all the terms and conditions of an offer or counteroffer in writing.

For more information on the home buying process, request our Home Buying 101 Kit that’s filled with valuable information to help make buying your home easier.

Together we should be able to successfully negotiate a reasonable price for the home to get you the most for your money.

Still looking for that perfect Redlands area home? Search all area listings now!