Jeff’s Carlsbad Blog for First Time Home Buyers


FAQs Part 10 – What are the Components of an Offer to Purchase?

Posted in FAQs,Financial,Mortgage info by Jeff Dowler on November 28, 2006

Paramount in most first time buyers’ minds is…what is an offer and how do I make one?

I previously talked a bit about what an offer is and who makes it, but let me share some more details on what goes into an actual offer (the paperwork used and even the details will vary from state to state). The California form (called the Residential Purchase Agreement and Joint Escrow Instructions) is 10 pages!! So it’s a bit frightening to new buyers. Let me chat about items in the CA document, but recognize that if you are in another state some things will differ – so have a good conversation with your REALTOR!

  • Description of the property – address, assessor’s parcel number, etc.
  • Price – probably the most important component. You need to lay out the initial offering amount and the amount of the downpayment.
  • Close of escrow date
  • Finance Terms – if you are not a cash buyer, you must spell out the details of the loan you are expecting to apply for – interest rate, amount to be financed, type of loan, timing of loan application, appraisal, etc.
  • Contingencies – there are a bunch of them to consider, and you must decide if your offer will be CONTINGENT on any/all of these or not. Among these are: 
    • Obtaining a loan (see Finance Terms above)
    • Allocation of costs – for pest inspection, escrow/title, reports, etc.
    • Home and other inspections
    • HOA/condo documents review and approval
    • Buyer investingation of property and matters affecting property including insurablity
    • Title and vesting – examination of preliminary title
    • Sale of buyer’s property (if applicable)
  • Contingency Removal Date
  • Time for Expiration of Offer
  • Buyer Inspection Advisory

There is lots more to read and review, but this will give you a good sense of the issues to think about in advance, and to discuss with your REALTOR.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: