So, you’re ready to purchase a home in the PNW real estate market. You’ve read the headlines and understand how quickly our market can shift. Whether you’re a seasoned vet or a first-time buyer, there is a lot to understand about our current market.
Your greatest ally for success is knowledge and a sound strategy. My clients approach the market educated and equipped with a plan to achieve their home-buying goals. Equally essential is a thorough understanding of the many intricacies of an offer and its presentation that we can use to position you as a strong buyer.
The market inevitably educates buyers. But with my guidance, you will save time, money, and potential frustrations along the way!
Locking down your dream home is about more than hastily signing a contract and handing over your earnest money deposit. It takes patience, attention to detail and a willingness to compromise. As a Certified Negotiation Expert, I’ll make sure your interests are represented throughout the process — and I’ll help you understand the complicated process of escrow, insurance, title searches and more so you always know what’s going on with your transaction.
To get a crash course in the closing process, I’ve highlighted some important terms and steps below for you to check out!
Earnest money is a deposit made, typically 3-5% of the offer amount, and held with the selling firm or escrow. This amount is presented with your offer in good faith and protects the seller in the event of a buyer’s breach of contract.
The deposit is made in the form of cashier’s check and must be deposited within two business days of mutual acceptance.
Earnest money is then rolled into the down payment at time of close.
An escalation clause is a tool buyers use to outbid competitors for a coveted home. Say you find the home of your dreams at a crowded open house. We have been made aware there is significant interest and other Buyers have, or will be making an offer. You don’t want to lose the home, but you also don’t want to pay more than you have to. The home is listed for $700,000, but because it’s so perfect for you, you’d be willing to spend $800,000 if you had to. Here’s where the escalation clause comes in. You submit an offer of $700,000, but you stipulate that if anyone comes in higher, your offer escalates to $15,000 more than the highest offer with a cap of $800,000. So, if the highest bid is $750,000, you’ll get it for $765,000. ( Not to exceed your cap of $800,000) You’re au- to-escalating your bid to exceed your competitors’ bids to get the home.
When a home is being financed through a lender, an appraiser is appointed to determine the home’s financeable value based on its condition and comparable most recent sales of listings in the area.
Once the appraisal has been conducted and the home appraises for the agreed upon sales price the loan can be processed. If a home appraises for less than the agreed upon price, additional negotiations may be necessary.
These are the costs associated with the curating and processing of your loan. The amount is variable depending on your loan type and purchase price amount and should be discussed with your lender. These fees are out of pocket, financed into the loan, or negotiated with the seller in a buyers’ or neutral market.
Escrow is a neutral third party appointed to ensure the closing proceeds smoothly including the transfers of money and documents. Escrow protects all parties by ensuring that no funds or property change hands until all conditions in the purchase agreement have been met.
A title is a bundle of rights to a piece of property in which a party may own either a legal interest or an equitable interest. The rights in the bundle may be separated and held by different parties. It may also refer to formal docu- ments, such as a deed, that serves as evidence of ownership.
Title insurance, typically purchased by the seller, protects the buyer’s rights to the property upon closing. Re- viewing the title is one of the main contingencies of every contract. Buyers have five days from receipt of the title report to review. Typically, the report is clean, but there are rare circumstances that can impede the purchase of a home.