|
It is standard practice to make a purchase offer contingent upon obtaining
a mortgage if you don’t plan on spending “all cash” for your next property.
Because of this, the seller will want details of your financing plan included in your offer.
Good Faith Deposit & Down Payment
In the purchase offer, even if you plan on obtaining 100% financing, placing
a minimum 1% of the transaction price as a good faith deposit is the norm. If you can, placing a higher amount is even better. By having a large good faith deposit or down payment sends a strong message to the seller that you are a serious buyer and that you are financially capable of performing. (And for those who never purchased residential property in California, the maximum the buyer can lose if they should default after the contingency period expires is 3% of the transaction price.)
Interest Rate
Within the purchase offer, we can provide a safeguard against any dramatic change in interest rates between when the offer is made and when the loan for the property is closed. The offer will not be contingent upon qualifying for the mortgage, but also contingent upon an interest rate within a certain range.
Seller Assistance
If the home that you selected is at the top-end range of your budget, we may want to include a request for seller assistance to pay a portion of the closing costs traditionally paid by the buyer. Or we can ask the seller to help “buy down” your interest rate. Other forms of seller assistance may include having the seller “carry back” a second mortgage to cover your down payment or even provide you 100% seller financing. However, unless the seller is very motivated, you can expect to pay a higher purchase price than if you handled this type of financing through a traditional mortgage lender.
If you have any special needs or concerns, together we can discuss how best to structure the offer to your particular situation.
|
