buyer contract review
*** Disclaimer - this is my own interpretation of these documents. You as the buyer always have the right to an attorney to interpret them for you as well. In the state of Colorado real estate agents are not attorneys but are given the same power as them to draft contracts for clients.
Buyer’s Agency Documents
The Exclusive Right to Buy
Definition of Working Relationships
Wire Fraud Disclosure
This document outlines details about fund transfers. Should you decide to receive your funds via wire transfer, you must verify wire transfer details with the title company ONLY, not your agent or the lender. It is best to call the title company and verify details over the phone or over their secure messaging systems instead of via email. People have lots hundreds of thousands of dollars in our state due to wire fraud transfer con artists getting in the middle of transactions, hence the reason for this form.
mhm Buyer’s advisory
Offers
Contract to Buy and Sell Real Estate
Post Closing Occupancy Agreement
COMPETITIVE offer TERMS
As we head out into the competitive world of house hunting, we wanted to give you a few strategies many buyers are using to win in competitive situations so you have time to digest it before we finalize an offer. If you end up not competing, the rules change & we do not have to consider the approaches below. With multiple offers very common, there are several ways to be competitive, some we agree with and some are risky. For example, many buyers are waiving inspection notice and even appraisal. But there are ways to keep those contingencies in place and modify them so that they are more attractive to the seller.
. PRICE - Of course price is a major determining factor, if not the #1 determining factor. If the home is new to the market, we recommend presenting your highest and best offer when you’re ready. We can also discuss using an escalation clause if necessary. In this case you present your purchase price and then agree to escalate that price a few thousand above the highest offer with proof that another higher offer exists.
EARNEST MONEY - You can increase your earnest money. The net result costs you nothing because any earnest money is credited back to you at closing. When your offer is accepted, earnest money is required within about 48 hours, it is cashed upon receipt and held in a trust account. If you were to terminate under the terms of the contract while acting in “good faith”, it is refunded. Increasing earnest money shows you are a serious buyer and sends a very good message to the seller.
FINANCING - is also important. To make your offer stand out, a solid pre-approval letter will be required along with any bank statements proving your ability to come with a down payment. Additionally, we will begin working closely with your lender so that he or she knows where we are in the process and is ready to make a personal phone call to the Seller’s agent on your behalf. When listing agents review multiple offers, there is a hierarchy of financing options where cash is superior, followed by conventional loans with the highest down payment, FHA loans, VA loans, and then financing programs using down payment assistance programs. The more cash you put down, the more competitive your offer looks, (especially 100% cash), and there are other things we can do to make your offer appear more like cash (such as sending your details through underwriting for approval).
TIMELINE - Presenting the Seller’s ideal time line is highly important as we go into the offer process. Some sellers may want a quick close while others may want a long time or even a rent back to find their replacement home. Depending on their situation, being able to offer them their ideal circumstances can work wonders to set your offer apart. I will secure these details for you before you make any decisions.
INSPECTION - When approaching inspection, many Buyers are waiving the inspection notice while retaining the inspection deadlines (you have the inspection but agree to refrain from submitting a list of repairs), or waiving the inspection process all together (We find this to be highly risky!). Depending on the condition of the home we can make recommendations on how to proceed. We can utilize a “health and safety” clause only, or we can be as extreme as to say that you will purchase the house in “as-is” condition.
APPRAISAL - Because many buyers are bidding over the list price or are paying cash, some waive appraisal conditions. If the house does not appraise for the agreed purchase price, the buyer is agreeing to cover the difference at closing. We are not a huge proponent of this practice as we believe down the road, you may feel that you have over paid for the home. In an extremely competitive situation we will review comparable homes and we will suggest to you what we believe to be appropriate regarding appraisal. Key in the process is the strong cover letter from us to the listing agent. As agents who works both sides of the real estate transaction process, we know that we prefer to work with an agent who presents herself professionally, is eager to work together as a team, and stays in communication throughout the process. In addition to a letter, we will be texting, emailing and calling as appropriate to provide you with accurate and timely information about your offer so you can make educated decisions.More earnest money down
POTENTIAL FOR “LOVE LETTER” SUBMISSION - see buyer FAQ for more on this
CONTINGENT OFFERS
NEW CONSTRUCTION CONTRACTS
If for some reason you decide to go the route of purchasing new construction, there will be a builder contract that the builder provides to us that is DIFFERENT from the Contract to Buy and Sell. I always send new builder contracts to the milehimodern legal team to review before my client’s sign the builder contract. When we submit, the listing agent may ask that we submit our terms via email, of which I will have you verify the terms via email. Or we may do a hybrid version of taking the Contract to Buy and Sell and inserting some of the builder dates and submitting it that way. Regardless, this is somewhat of a fusion of terms and communication methods, but the builder contract is always the default contract that needs to be signed in order to say that you are “Under Contract”.