The real estate offer is a contract that you enter in with the
seller to agree upon the terms of sale of a piece of property.
An offer has to have the following to be valid:
- Mutual Agreement
- In Writing
- Identifying the parties
- Identify the property
- Purchase Price
- Consideration
- Signatures
Usually you can get a copy of a purchase agreement from your
local realtor if you are doing a FSBO. If not do a google search
on "real estate purchase and sale agreement". Find one
that you like and buy it, it shouldn't cost you more than $16.
Now that you have a blank purchase and sale agreement you should
fill it in with the following:
- Close on the third( for example June 3rd). This will give
you the lion share of the months rents and will allow you to
delay your paying a mortgage payment until August 1st. If you
aren't buying an investment property ignore this.
- Ask for seller financing.
- Weasel clause. Just in case you want out at the last minute.
A good one is subject to approval of partner with no time limit.
(your partner can be your wife, your partner or your dog). If
you are forced into a timeframe (and you probably will be) choose
as long as possible.
- Subject to building inspection. If you are qualified you can
do the inspection but I always get a pro.
- Cash back. I always try for a cash back between the asking
price and the negotiated price. So if they were asking 100,000
and I got it for 90,000 I would write up the contract as a 100,000
deal with a 10,000 cash back. This would give me 10,000 to put
down as a down payment.
- Write and/or assigns after your name. This allows you to sell
the contract to someone else for a profit. Not necessary if
you are buying a house for yourself.
- Subject to financing. You should probably get at least 14
days to get financing unless you are a shoe in. We usually need
30 days which produces quite a problem when trying to get financing.
- Right to show. Allows you to show the apartments to renters
or buyers before you close.
- Never have a deposit of more than 1000.
- Proof of rents and expenses using the schedule E from the
previous year and a revenue and expense if it is too early for
taxes this year.
- A copy of all the leases.
- Review by Buyers Lawyer.
- If this is a foreclosure deal, it should be subject to title
report.
Some of the clauses are specifically for investment real estate
but homeowners should be as interested as investors in seller
financing. It can be a cheap way to finance your house. Talk to
your lawyer about any specific clauses that you want to add. If
you want the seller to do some work before you take possession,
your real estate agent may have a clause for that but have your
lawyer review it before you waive conditions.
Real-Estate-Haven
