What does “multiple offers” mean?
A multiple-offer situation is when there is more than one offer on a property at the same time. Sometimes you will hear that sellers are “waiting to review offers” for several days to a week. This allows the seller to get full market exposure, while increasing the possibility of multiple offers.
What are comparables, or “comps”?
Comparables are recently sold properties that are similar in location, size and amenities to the home for sale. Looking at them can give you a clearer idea of market value.
What is an escalation clause?
An escalation clause declares that you will pay a stated amount for a property, but if there are higher offers, you will increase your offer by a set amount over the highest competing offer, up to a designated maximum price. For example, if a house is listed at $550,000, you might say you are willing to pay $550,000, but will beat any higher offer by $1,500, up to a maximum purchase price of $575,000.
What is a pre-inspection?
A pre-inspection is a property inspection done at your expense before you make an offer. Some buyers choose to pre-inspect in a multiple-offer situation, as it allows them to waive their inspection contingency and make a stronger offer.
How large should my earnest money be?
Your earnest money shows the strength of your commitment to the seller. It needs to be an amount you are comfortable with, that also satisfies the seller’s need for security. It is often expected to be 2% to 3% of the purchase price, but is negotiable. Talk with your agent about what amount makes sense in your situation.
A contingency is a provision included in a sales contract stating that certain events must occur or certain conditions must be met by a particular date or the contract is terminated and the earnest money is refunded to the buyer. In real estate the terms “subject to” or “conditioned on” are often interchangeable with “contingency;” i.e. “the offer is subject to inspection.” A “contingent offer,” however, is a term generally reserved for an offer which is contingent upon the sale of the buyer’s current home.
A counteroffer is an alternate offer made by one party which changes the original or latest offer of the other party. All parties must agree to the changes in writing for the contract to become binding.
What is the difference between signing and closing?
Your signing appointment is when you sign the legal and loan documents necessary for the transaction to close. It generally takes 1-3 days after your signing appointment for your loan to be funded, and for the transaction to be recorded with the county and officially closed. You will receive keys when the transaction closes.