Ready to make an offer

So what do we do? Do we contact the seller's RE (we aren't working with an agent) and make the offer? Should we get our pre-approval beforehand? What are our next steps?

Re: Ready to make an offer

We're working with an agent so we always made an offer through our agent.

Definatly make sure you have the pre-approval first!! One thing our agent has stressed to us to have your "ducks in a row". The sellers will take your offer more seriously if you know what lawyer you're using, you're already approved, etc.
Best of luck to you!!

Re: Ready to make an offer

Congratulations on finding a house you like!

If you don't have an agent, how did you see the house? Did you go to an open house? If so, you should contact the agent who was there at the open house, as you are considered their customer (by that real estate office). If the listing agent showed it to you, then yes, you would let the listing agent know that you want to make an offer. In either scenario, just keep in mind that the real estate agent is working for the seller, NOT for you, so that agent's job is to get the best deal for the seller. All of that agent's fiduciary duties -- of loyalty, confidentiality, etc. -- flow to the seller. You have no one representing your interests.

Therefore, if the house is listed at, say, $429K, and you want to make an offer for $390, but in reality, you are willing to go up to $410K, do NOT confide in the agent that you want to start low but you can come up. That agent is obligated to then tell the seller that you are offering x but you will come up to y. Likewise, if that agent knows that the sellers are getting divorced and must sell and are willing to take $375K, the seller's agent cannot share any of that info with you.

As for being prepared, yes, you should have a preapproval letter from a lender, even if you ultimately decide to go with another lender (you are not locked into the one you got the preapproval from). But a seller is not going to take your offer seriously if they do not know that you can get the financing to afford the house.

Other steps:

1. Choose a home inspector. You want to have the house inspected asap, ideally before you go to contract (although the contract can be contingent on the home inspection).

2. Choose a real estate attorney. Once the offer is accepted, your attorney needs to reach out to the sellers attorney to get the ball rolling and have the contracts prepared. Until the sellers sign the contract, they aren't locked in to the deal, so you want to get that done sooner rather than later. Make sure your attorney is a real estate attorney with experience with closings; I've seen Wall Street attorneys, for example, kill deals because they don't know what they are doing (and I used to be a big firm attorney, so I can say that!).

3. When you make an offer, keep in mind it's not just about price, but you also want to make sure you agree on all terms, such as closing date. You don't want to agree to a deal if the seller is having a new house built down south and it will take months, but you need to be in your new house by April, you know?

4. You want to ask the listing agent about COs. Does the seller have COs for any changes they made to the house (and usually, people have done something). This will ultimately come out when the lawyers get involved, run title, etc., but it's good to know up front and I always ask before I let my customers make an offer.

Good luck!

Re: Ready to make an offer

Thanks for the tips!!

So, we can get preapproved quickly from any bank and then need not necessarilly use that bank for our mortgage, correct?

Also good to know about not confiding too much in the seller's realtor. We met her at an open house but do understand she is not there to help us out!

I already have a RE lawyer I used to sell my co-op recently.

We have more than 20% to put down.

The house has a fireplace and we'd like to get a fireplace specialist in to do the inspection as well, is that normal?

Re: Ready to make an offer

Yes - usually you can get a preapproval within 24 hours, but you are not locked into using that bank. I've had customers shop around after making the initial offer and find out they can get a better rate via another lender, and go with them. You usually have a set period of time to get a mortgage commitment, though (usually 45 days in the contract), so you want to apply for your loan with the lender you select asap once the contract is signed.

Keep in mind that smaller banks and credit unions are generally faster at processing loans these days and easier to work with, so that may factor into your decison.

As far as the fireplace, you should obviously do what makes you comfortable, but in my experience, most people just have a typical home inspection and do not have a specialist come in to look at the fireplace (unless of course something is flagged by the inspector as an issue). I just sold a home with a fireplace and there was no special inspection, and when I bought my own house (with a fireplace), we also just had a general inspection done. Usually the home inspector will advice you to find out when the chimney was last cleaned and sometimes point out gaps in the brick (where the mortar has crumbled), but that's normal wear and tear and not really a defect that needs immediate remedying. But again, if there's something that concerns you, by all means, have everything looked at.

But on the CO issue point - many times fireplaces are not original, so that is something you'd want to make sure that the sellers got the proper permits for, esp. if you plan on keeping the fireplace and don't want to have it closed up. Depending on the town, it can be a long process to obtain COs, even with an expediter. And nowadays, many banks won't let you close without all COs in place (whereas not that long ago, you could close with money in escrow to address the issues).

Re: Ready to make an offer

Re: Ready to make an offer

Good to know, Beth. Maybe things are turning around!

But in my office, we have had bad experiences recently with a lot of the bigger banks, such as Wells and Chase, and great experiences with places like Mortgage Concepts and the Bethpage Credit Union (in terms of being able to close deals more quickly).

Re: Ready to make an offer

I have a buyer using mortgage concepts now- so we'll see how that goes

if you need a person at CHL let me- I work very closely with them- they have never let me down

they are also do more FHA loans then all the other banks in the northeast combined

Re: Ready to make an offer

I dont know if you made an offer yet, of if you signed anything with the sellers agent when you saw the house, but I strongly urge you to use an agent. I didnt feel we needed one for viewing homes, but once we went into contract is was a nightmare. You def want someone on your side and as a sounding board. JMO.
GOod luck!!!

Re: Ready to make an offer

Re: Ready to make an offer

Re: Ready to make an offer

Message edited 2/24/2011 2:26:44 PM.

Re: Ready to make an offer