Real Estate Contracts:Making an OfferDan MullinsRedfins Seattle Team
A Little Bit About Who We AreRedfin is a real estate brokerage that has helped over 20,000people buy or sell a home; 97% would refer us to a friend.● Customers, not commissions● Informed decisions● The right home for the right price No obligation Get back a portion of our commission
How Our Team Works AGENT Responsible for your success Writes your offer Handles negotiations YOU FIELD AGENT COORDINATOR Takes you to see homes Schedules tours See 50+ homes a week Prepares paperwork Works with escrowConsidering… Looking… Buying…
Benefits of a MLS Powered Site All the homes for sale: 30% more listings You see what the agent sees: 4x the data Real-time market data: photos, details of just-sold homes
Why You Should Buy a Home● You have a family and need room to grow● You expect to stay put for 5 or more years● You want a home that is difficult to rent● You’re handy & and ready to invest● You’ve saved up a down payment
Why You Shouldn’t Buy a Home You don’t have a good reason like family or schools You can’t afford the down payment You can rent for much less You plan on moving soon You’re worried about job security
Offer DocumentationTo submit an offer we need to include severaldocuments: Pre-approval Letter Proof of Down Payment Funds Copy of an Earnest Money Deposit Check Optional: FICO (credit) Scores Other forms: RELO Addendum; REO Addm. etc.
Form 21: “PSA”a) Purchase price - you can afford to pay the price, subject to any contingencies mentioned in the offer, like financingb) Earnest money 1. Deposit with escrow, 3 business days of offer acceptance 2. You get it back if you back out using a contingencyc) Included items – if it’s attached it’s generally includedd) Condition of title – have to be able to re-sell the home, but there may be conditions on the title like easements or HOAe) Title insurance – seller pays for the “owner’s policy”, buyer pays for the “mortgage policy”
Form 21: “PSA”f) Closing and Possession – officially closed when transfer documents are recorded, possession is 9pm that day unless otherwise agreedg) 1031 Exchange – relatively uncommon, no liability or expense for the cooperating partyh) Closing costs 1. Buyer and Seller split escrow fee 2. Taxes, HOA dues prorated to the day of closing 3. Seller pays certain fees 4. Buyer pays certain fees unless otherwise negotiatedi) Sale information – agents will report sales price to the MLS
Form 21: “PSA”j) FIRTPA – only affects the sellerk) Notices – your agent will handle this on your behalfl) Computation of time a) 5 days or less – business days b) 6 days or more – calendar days c) Contingency periods cannot end on a weekend d) Most time periods expire at 9pmm) Fax and email – same as original signaturesn) Electronic signatures – same as original signatureso) Assignment – requires the Seller’s permission
Form 21: “PSA”p) Default – if Buyer defaults, they may lose earnest moneyq) Professional advice – you’re advised to talk to an attorney. If there is a suit, the person who loses pays the fees.r) Offer – default offer expiration is 9pm on the date noted. Acceptance must be in writing.s) Counteroffer - default offer expiration is 9pm on the date noted. Acceptance must be in writing.t) Offer and counteroffer expiration date – if not specified, an offer or counteroffer is good for 2 days.u) Agency disclosure – explains which agent is working for which party.
Form 21: “PSA”v) Commission – paid by the seller at closingw) Cancellation/Lead Based Paint – if the home is built prior to 1978 and no disclosure is made prior to an offer being signed, you have 3 days from receipt to cancelx) Information verification – if within 10 days you discover that something significant about the property was in error, you may have the right to rescind your offer. This section also includes language about the buyer’s agent and listing agent relying on information provided to them by other parties.
What happens when the documents are complete?Sign – typically via DocuSignSubmit – with your pre-approval letterWait for a responseCounter – if necessaryAcceptance – when signed by all partiesNext steps – your Agent and Coordinatorwalk you through the rest of the way
Questions? Dan Mullins (206) 799-8810Dan.Mullins@redfin.com
Our next class! Multiple Offer Class September 20, 2012 6:00pm – 8:00pm Redfin’s Seattle Office (Same location)http://www.redfin.com/buy-a-home/classes-and-events