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Writing an offer
Writing down an offer to
present to a seller is probably the most difficult task that you are probably
going to face when you try to buy a house. It’s generally a good idea to seek
the services of an attorney, and your realtor or real estate agent to help you
detail exactly what you want and also what information you need to make an
informed decision about whether or not you really want to purchase the
property.
The first thing that you
need to consider when making your decision on the property and when writing an
offer is what information do you have available about the condition of the
property.
This information can come
from a variety of sources, however the main source of information about the property
is from the present owners.
Under state laws the seller,
either an individual or a bank that is selling and REO (real estate owned)
property are obligated to disclose information about the property, including
faults and violations etc that will have an impact on the buyers decision to
purchase the house.
Anyone can look around a property
during an open house, or personal tour, however you want be able to pick up on
half as many of the problems that the seller knows about; as a seller have been
living in the home for years. The information
they have regarding the property is important and might be vital to helping you
make the right decision.
Although the seller is
legally required to make known all facts materially affecting the value, or attractiveness
of their property that are known to them, you should nevertheless have the need
for a property disclosure placed into the offer you present to the seller.
Normally the disclosure of the relevant information is given to the buyer as a
form called a ‘disclosure document’. The most frequent information
noted in the disclosure form includes:
Description of equipment in the kitchen
List of safety feature in the property
Items physically attached to the outside of the
house
Amenities and other facilities in the house
Style of heating and its condition
Type and condition of Water supply
Any faults or defects that exist in the property
Environmental hazards
Walls or fences shared with adjoining landowners
Room additions or repairs
Zoning violations
Citations against the property
Lawsuits against the seller affecting the
property
Any deaths in the past three years
You must make sure that you
have a written guarantee that additions or repairs that were made had all the
essential permits and where in compliance with building codes.
Another important item that
you should have written into the offer is what you expect the state and
condition the property to be in when you take ownership of it.
Most people have at some
point found an apartment to rent that looks great when there are shown round
and then is a mess when they move in. To avoid this situation it is important
that you lay down in writing exactly what you expect to find when you move into
the property. The last thing you want is to move into your new place and then
spend weeks cleaning and making livable. Stating the minimum standards of
cleanliness, housing condition and the contents that belong to the house is a
good idea.
As the buyer you have a
right to negotiate with the seller on what you would expect from the seller as
a clean house. The main areas that you may wish to focus on a could be:
Curb appeal and the outside of the property: how
the outside of the house looks. Generally you would want the exterior to
look clean and tidy.
Interior general cleaning: want the house to be
fit to live in when you move in. Make a note to ask for items like clean
windows, shampooed carpets and new paint on the walls, etc.
Replacement of all worn fixtures and fittings:
No one wants to move into a house to find that the bathroom light is
Asking for all of the above is the
first start, but remember that the sellers will not want to spend too much
money on cleaning and fixing things. You should negotiate with what you
absolutely must have clean then work from there
Also when negotiating the condition
of the house, make a point to find out what items come with the property and
what are legally the sellers, so there is no confusion when you move in.
When writing an offer it is
always important to think about the need for inspections. It’s not an easy
judgment to decide if a property is suitable to live in and regardless of the
information you may have received in the disclosure form it maybe worth your
money to have a some inspections carried out on the home; to help estimate its
true value and condition.
There are various types of
inspections, each different from the next and carried out for different
reasons. Some of the inspections that you maybe interested in having carried
out are:
Home appraisal: This is used to discover what
the property is really worth and if you are paying too much for it. A home
inspection is carried out by a professional inspector and as such can be
expensive.
General home inspection: An inspection of a
property is carried out by an ASHI (The American Society of Home
Inspectors) licensed inspector, who checks the overall condition of the
property, noting any faults where they maybe found and then producing a
report to the buyer.
Pest/termite inspection: A pest or termite inspection
determines whether there are any problems with a property due to pests or
termites.
Plumbing Inspection: A house examiner normally
conducts the plumbing inspection, checking various functions, such as the
water pressure, and looking for signs of leakage and rust.
Water inspection: Cities that supply water are
required to carry out routine water tests. If the property you are buying
at has a private source of water then you should think about a private
water testing inspection to find out the bacteria content and mineral
content of the water.
Lead Test: if the property is old a check for
lead content in the house maybe appropriate, to make sure that it is at a
safe level.
Septic/Cesspool Testing: Septic testing
involves testing the overall functioning of the system.
Radon test: Radon testing should be used to
check that the level of Radon gas in the house is at a safe and normal
value for the area you live in.
Asbestos inspection: This test is carried out if
the property is old.
Electrical test: This inspection usually covers
essential electrical system inspections, comprising of an number of tests.
New Home Inspection: If the house that you are buying is relatively new then you
may wan a new home inspection to check various items to check that
everything was put together correctly.
Once everything is complete
and the offer is 99% finished don’t forget to think about adding one final
clause: the final walk through.
A final walk through is one
of the most basic, yet important parts of any real estate deal. Although we
would like to believe everything that we are you can’t afford to take someone’s
word; you should have everything written down before submitting the offer.
In general it is good to go
on a walk through with a realtor no sooner than five days before closing the
deal. Whilst not being a really complicated process, everyone has his or her
own idea of what the final walk through should incorporate. Below is a
suggested itinerary of the walk through:
Outside the house: start your final walk through
outside and examine everything that you asked to be looked at.
The garage: If the property has a garage make
sure that it has been cleaned out, and that the garage door actually open
and closes freely.
Bottom floor of the house: This will have lots
of rooms and you should check each individually. Normally in the bottom
floor you should look through the living room, kitchen and washrooms for
signs of faults, un completed repairs and anything else that you placed in
the offer.
Second and third floors: The sleeping areas
should be checked to make sure that they are fresh and clean and all
furniture is still where it should be.
Attic: If the property has an attic check that
all the owners possessions have been removed.
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