The Offer Process, Step-by-Step
The Purchase Offer, Binding Agreement and Deposit.
Once you have found the property you want to buy, our agents will help you to create a competitive Purchase Offer to be presented to the Seller. The Seller will then accept or Counter Offer the original Offer and this process will continue until all parties have either agreed to terms or have reached an impasse. Once all parties have agreed to terms it is referred to as a Binding Agreement. A Binding Agreement is a legal agreement between a potential buyer and the property’s seller. When making the Purchase Offer the Buyer will need to write an Earnest Money Deposit check to be held by the Closing Attorney. The check amount is very important so as to demonstrate a certain level of seriousness and commitment to the deal. Our agents can help you to determine the proper amount of the Earnest Money Deposit. Please note these funds are fully refundable until the Buyer’s Due Diligence Period has ended at which time these funds become non-refundable.
Some important tips to keep in mind to streamline the process:
- Keep written records of everything. For the sake of clarity, it will be extremely important to transcribe all verbal agreements including counter-offers and addendums into written agreements to be signed by both parties. We will assist you in drafting all the paperwork for your purchase and make sure that you have copies of everything.
- Make sure to provide your Earnest Money Deposit within the time frame agreed upon.
- Stick to the schedule. Now that you have an accepted offer, you and the seller will be given a timeline to complete every step in the process of closing the real estate contract. Meeting the requirements on time ensures a smoother flow so that each party involved is not in breach of their agreements. During the process we will keep you constantly updated, so you will always be prepared for the next step.
The Closing Agent.
In Georgia, typically a Closing Attorney will be selected as a closing agent. The closing agent will hold the deposit in escrow and will research the complete recorded history of the property to ensure that the title is free and clear of encumbrances by the date of closing and that all new encumbrances are properly added to the title. Some properties are subject to covenants and restrictions which limit various activities. There may also be recorded easements and encroachments, which limit the rights to use your property.
How to Hold Title.
You may wish to consult an attorney or tax advisor on the best way to hold title. Different methods of holding title have different legal, estate and tax implications, especially when selling or upon death of the title holder.
Inspections.
Once your offer is accepted by the seller, you will want to have a licensed property inspector inspect the property within the time frame that was agreed upon in the effective contract to purchase. You may also elect to have different inspectors inspect different aspects of the property, We can recommend various inspectors or you are certainly more than welcome to find one on your own.
Depending on the outcome of these inspections, generally one of two things may happen:
- The property has no major issues and the contingencies will be removed, bringing you one step closer to the close, or
- The buyer, after reviewing the property and the inspection results, requests a renegotiation of the terms of contract. Note it is important to be realistic…. If you are not buying a new construction home virtually any resale property will have some flaws.
Appraisal and Lending.
It is imperative that you keep in close communication with your lender, who will let you know when additional documents are needed to approve your loan application. If the agreement is conditional upon financing, then the property will be appraised by a licensed appraiser to determine the value. Appraisers are specialists in determining the value of properties, based on a combination of square footage measurements, building costs, recent sales of comparable properties, rental income, etc. On a regular basis it is important to check with your lender to be sure the loan will go through smoothly and on time.
Property Insurance.
If you are obtaining a loan, you will be required by your lender to purchase a certain amount of insurance on the property. The value will depend on the lending institution and the purchase price of the property. You may be able to save hundreds of dollars a year on homeowners insurance by shopping around for insurance. You can also save money with these tips.
- Consider a higher deductible. Increasing your deductible by just a few hundred dollars can make a big difference in your premium.
- Ask your insurance agent about discounts. You may be able to get a lower premium if your home has safety features such as an alarm system. Persons over 55 years of age or long-term customers may also qualify for discounts. If it’s a second home, and a Home Watch Service is engaged while you are away, many insurance companies offer discounts if weekly inspections are performed.
- Insure your house NOT the land under it. After a disaster, the land is still there. If you do not subtract the value of the land when deciding how much homeowner’s insurance to buy, you will pay more than you should.
We are happy to recommend experienced/knowledgeable insurance agents for every type of property.