10. COVER ALL PERTINENT ISSUES IN THE OFFER
Almost all agents use the same forms. Certain companies have some of their own forms. The ones I discuss here are ones provided by the Northwest Multiple Listing Service. (NWMLS).
|There are 3 basic methods to put
together an offer.
|FORM 21 #4 APPLIANCES Mark the appliances that the seller has offered in the listing. If you want other appliances, I find it is best to attempt to find out ahead of time how much the seller may need an appliance you want. 3 methods
|FORM 21 #5 PURCHASE PRICE If you are making an offer utilizing method 2 above, then you and your agent can try to second guess what the lowest price is that the seller may be willing to go. Offer about 1% or less below that amount and you may get it right there. If you offer too much below that, the seller may counter offer at the lowest price they had in mind. I find that Example B works best for the buyer.
|Value in seller's mind
|Seller's probable counter offer
|FORM 21#6 EARNEST MONEY First, be aware that the only way you lose your earnest money is if you and the seller are able to meet the terms of the offer regarding financing for example and you change your mind. You could also lose it if your agent doesn't protect you by inserting contingencies for terms you aren't sure you can meet. If you are are using method 1, then a 2% or higher earnest money is in order. You may be in competition and the higher earnest money is what may sway the seller. This also works for method 2, because the seller may take a lower price if that big earnest money check is sitting above the earnest money agreement while the seller reviews it. If you are using method 3 then 1% should suffice. The seller can always counter offer on the amount of earnest money. A personal check is preferable. In another part of the agreement, the check should be noted to be cashed after the inspection is removed. The newer versions of the inspection clause make note of this.
|FORM 21 #7 DEFAULT-EARNEST MONEY A buyer would want to mark "Forfeiture of Earnest Money" as this would limit their losses to the amount of earnest money.
|FORM 21 #10 CLOSING DATE Make sure to choose a date that you will be sure to be able to meet in time. Otherwise the agreement expires and you can lose your right to purchase. You may cover yourself by adding a line in an amendment that gives an automatic extension for a particular time period in the event that the sale is not ready to close through no fault of the buyer or seller.
|There are plenty of other areas of concern in filling out an earnest money agreement. I have attempted to cover ones that may help buyers be aware of issues that may be of help to them.