Making an offer on a Home

• Purchase Price – In New Jersey’s current housing market, you will likely need to set your price at the list price or slightly above to get the seller to consider your offer.
• Earnest Money Deposit (EMD) A sum of money a buyer pays to a seller as a show of good faith when making an offer on a home, demonstrating their serious intent to purchase. Earnest Money Deposit – This is a good faith deposit that shows that you are serious about the purchase. It is paid after the offer is accepted, the contract is signed by all parties, and the Attorney Review A period, often a few days, for both parties in a real estate contract to have their attorneys examine, negotiate, and potentially modify the contract before it is legally binding. attorney review period is completed. (More on attorney review later in this section.) The earnest money deposit should be held in an Escrow Account A temporary, neutral holding account managed by a third party to hold funds or assets for a transaction until all conditions are met. escrow account and will go toward your down payment on the house. Typically, the earnest money deposit is 1% to 3% of the purchase price.
• Proof of Pre-qualification – In addition to the Preapproved A lender has given providional approval for a loan after a preliminary review of your information. This is not a final guarantee, but it indicates that you are likely to be approved for the offer. mortgage preapproval letter discussed in detail in ‘Step 3’, you may want to include copies of bank statements or other proof that you are financially able to complete the purchase transaction.
• Contingencies – Contingencies Conditions that must be met for a sale to proceed. Contingencies are conditions that must be met for the sale to proceed. Some standard contingencies are for mortgage approval, Home Inspection A professional, visual evaluation of a house’s physical condition, from the foundation to the roof. home inspection , and Appraisal An estimate or judgment of the value of a property and its permanent structures. appraisal of the property. Your real estate agent or attorney can help you decide which contingencies to include and which you can waive to be a more competitive buyer.
• Items Included in the Sale – It is common for certain items, such as appliances or lighting fixtures, to be included in the sale. Be sure to specify what items you expect the seller to leave with the property but limit your request for extras, so the seller doesn’t view you as a problematic buyer.
• Closing Date – The Closing Date Closing is the final step in a real estate transaction where all legal documents are signed, money is exchanged, and ownership of the property is transferred from the seller to the buyer. closing date is the date for finalizing the sale. Knowing the seller’s preference on the closing date could be helpful. If you can be flexible, this is where you may have an advantage over other prospective buyers.

The seller may accept your offer to purchase the home, but if they want to change any part of the offer, you may receive a counteroffer specifying those changes. You are free to accept the counteroffer or respond with a counteroffer of your own. The exchanges of counteroffers are often made verbally but must be finalized in the form of a binding contract if and when they are agreed upon. Be sure to immediately notify your real estate agent or attorney if you want to revoke your offer.

The Attorney Review A period, often a few days, for both parties in a real estate contract to have their attorneys examine, negotiate, and potentially modify the contract before it is legally binding. attorney review period in New Jersey is three (3) business days and starts when the buyer and seller have both signed the contract. During the review period, both parties can ask for changes to be made to the contract. They may also cancel the contract for any reason.

It is customary for the buyer to hire a professional to inspect the property. The Home Inspection A professional, visual evaluation of a house’s physical condition, from the foundation to the roof. inspection is performed within the time frame specified in the contract and is at the expense of the buyer. You may be present at the inspection. If the inspector finds that repairs are needed, you may be able to negotiate with the seller on the cost of the repairs or have the seller make the repairs prior to the closing date. Of course, if you have agreed to waive the inspection contingency, you may not be able to get the seller to agree to compensation for needed repairs.

Once the attorney review period is completed, the clock is ticking, and you will want to get your mortgage application process started right away. It is likely that your contract specifies a period of time allowed to obtain a mortgage commitment. Remember that it is important to avoid making large purchases and any significant changes to your income or credit from now until closing. This is also a good time to apply for any down payment assistance programs that may be available to you.