Offer Process Overview: Here is the information that we will discuss when you have decided to submit an offer.
I will record a video for you that goes through your offer documents—please watch the entire video to ensure that you understand the dates, details, and contingencies; please make sure your name is spelled correctly and that there are no other errors; if you have questions we will talk through them. Once you have approved you will sign the offer documents electronically. Please do not sign what you do not understand!
FULL LEGAL NAME(S) OF BUYER(S) & LEGAL MAILING ADDRESS: Who will be on the loan? Co-signer? Additional people can be added to the Deed even if they aren’t on the loan. Discuss with your Closing Attorney and Mortgage Lender if this person should also be added to the Contract.
PURCHASE PRICE: We will discuss the purchase price that makes sense for each individual property. I will provide you with market data & your lender will be able to help you to understand your monthly mortgage, down payment, and closing costs. I will need to know if you want to include an Escalation Clause and, if so, the cap and increments.
CONTINGENCIES TO INCLUDE IN YOUR OFFER: You need to fully understand the contingencies that you want to include in your offer. Examples: Mortgage Contingency, Appraisal Contingency, Inspection Contingency, Sale of Current Home, etc.
ESCROW DEPOSIT: Your Escrow Deposit will be due within 24-48 hours of the contract being accepted by the Seller. This means that the funds need to be available in your account BEFORE you submit an offer. Many companies still require physical checks while some have an electronic mobile deposit option or Wire transfer. Please be prepared to be required to submit a check. The amount of the deposit is entirely determined by you but please understand its role in a competitive offer strategy.
INCLUSIONS/EXCLUSIONS: Review the property disclosures and ensure that all items that you want the seller to convey has part of the sale have been included on the contract OR that you understand what is NOT included. Typically this is limited to appliances. We do not include personal property, such as furniture, on the contract. Any personal property items will be listed on a separate document.
APPRAISAL: Sellers will give preference to offers which waive the appraisal and/or include an appraisal guarantee or an appraisal gap. Discuss your options with your lender and with me. I have a video series on my YouTube channel that covers this topic.
INSPECTION: Sellers will give preference to offers which waive the inspection, or those that include limitations on the repairs that may be requested. Additional options would be do reduce the time period of the inspection timeline. Standard on the Rhode Island Purchase Contract is 10 business days. I have a blog post on this topic that I encourage you to review.
CONDO DOCS: If you are purchasing a Condo, you need to understand the HOA fees, what the fees include (water, sewer, maintenance, other amenities?), what is the parking situation, fully read through the By-Laws and condo documents, fully understand the budget and the amount of Reserves that are in the account, and if there are any current or upcoming Assessments.
TENANCIES: If you are purchasing a Multi-Family property you need to understand the tenant situation and what will convey. Can all units that are currently occupied remain? If Leases are not available prior to submitting your offer make sure it’s written in the Purchase Contract that you have an option to review and verify information. Are there security deposits that will convey?
CLOSING DATE: Does the Seller have a preferred closing date? Are we able to offer a flexible closing date? Would a Leaseback be advantageous to a Seller? Do you have a specific date that the property MUST close? You need to understand that closings get moved for many reasons that are beyond our control and have a couple backup plans in place in the event that the date gets moved.
As always, I’m here to help and that includes making sure that you are fully prepared and informed. Who you work with matter!