Steps To Achieve A Winning Bid

Steps To Achieve A Winning Bid
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The more intentional you are about what you offer, the higher your chances of making a successful bid. These steps will help you get prepared.

 

  • Contract. Take time to review sample offer forms before you purchase a house. If you’re well-maintained, a real estate attorney can explain the documents to you, so you are able to become more familiar with their vocabulary for when you’re ready to pull the trigger on an offer with your agent. Your agent will have offer forms for your state.

 

  • Limitations. Your agent will help you build a winning offer. You can trust your agent’s advice on price, contingencies, and other terms of the deal. It’s a mutually beneficial relationship. The more collaborative you are with your agent, the more quickly you’ll be able to move.

 

  • Down payment Terms. To get a mortgage, you have to make a down payment on your loan. For conventional loans,  making a 20% down payment enables you to avoid having to pay private mortgage insurance (PMI), a monthly premium that protects the lender in case the borrower defaults on the loan.

 

  • Set your price. Several factors can also affect your bargaining position and offer price. As the buyer, your offer will include an offer price. This is the first thing home sellers look at when they receive a bid.

 

  • Make a deposit. In most cases, the title company is responsible for holding the earnest money in an escrow account. In the event the deal falls through, the title company will disperse the funds appropriately based on the terms of the sales contract. Title companies also check for defects or liens on a seller’s title to make sure it can be transferred cleanly to you.

 

  • A date to settle. The sales contract you submit to the seller must include a proposed settlement date, which confirms when the transaction will be finalized. One thing that’s the same no matter where you live, is that you’ll have a three-day period prior to settlement to review the Closing Disclosure, or CD — a five-page form that states your final loan terms and closing costs.

 

Contingencies:

 

  • Appraisal Contingency. Where a third-party appraiser, hired by the lender, evaluates the fair-market value of the home to ensure the home is worth enough money to serve as collateral for the value of the mortgage. 
  • Financing Contingency. Gives home buyers a specified amount of time to get a loan that will cover the mortgage. 
  • Home Sale Contingency. Where the transaction is dependent on the sale of the buyer’s current home.

 


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