Articles & Information Resources Other Money Saving Tips:
Assume a mortgage: Check if you can assume the mortgage of the seller. This may sometimes be beneficial if the existing mortgage has a lower interest rate.
Get money from the seller for closing expenses: During your negotiation with the seller, you may consider adding your estimated closing costs to the price of the house. This is only possible if the appraised value of the house is at or above this revised price. The downside is that your mortgage payments may be higher. You should run a few scenarios in which you calculate the upfront cost and the monthly mortgage payments with and without the adder (closing costs added to your price) to determine the best financial fit for you.
The Offer:
Typically, you will work with your agent to complete a preprinted offer form. We have included one for your reference in the ‘Forms’ section. Acquaint yourself with this document. You will complete a similar document. Common items on the offer form include:
- Name of the buyer and seller.
- Finance terms – loan details, contingency clauses, price, down payment, amount of deposit etc.
- Closing and occupancy details.
- Cost allocation – costs to be borne by seller and buyer.
- Disclosures.
- Title information.
- Time Period on the offer, removal of contingency, cancellation clauses (language), close date etc.
Tips
- Write your offer based on your desirability for the house and the competition for that house. Leave room for negotiation both on price as well as other areas of your offer. Review comparables to determine your price. Determine the lower and upper bounds of your offer after an assessment of comparables and your own affordability.
- If you are not in a very competitive market, request the buyer to fix any repairs or glaring problems unearthed by the inspection report. If you desire any appliances, note them in the offer letter. Include contingencies if you feel they won’t harm your chances of success.
- In a seller’s market, you may want to offer a price close to the asking price as well as exclude contingencies.
- A signed sales contract is legally binding so ensure that you are comfortable with your offer before you sign off on it. Seek your agent’s help or consult an attorney if necessary.
Closing the deal:
We have included a closing sheet in this section. This closing sheet includes the most common closing costs you may have to pay. Typically the closing costs comprise of the downpayment, fees associated with the loan (points, escrow fees, loan origination fees, credit report etc), advance fees (home owner’s insurance, mortgage insurance if applicable), prepayments (insurance, property taxes), title charges (legal fees, notary, title insurance), government recording fees and other/miscellaneous fees (document preparation etc.).
We have included a copy of the HUD-1 Settlement Statement in this section. This is commonly used to document closing costs.
In addition to completing the HUD-1 statement, be prepared to sign numerous documents including mortgage documents, affidavits, disclosures and other forms required by the lender.
