We Found a Home – Again

We’ve discovered that when you find a home that is a good value, someone else is probably discovering it too.We found another home, this home is owner occupied and they seem to be asking a fair price.  The price per square foot ratio is lower than the neighborhood average, and it seems to be in good shape structurally.  It could use a little cleaning and cosmetic work, but otherwise it seems like a really good deal. 

This particular home fits most of our requirements so we put in an offer for it.  In looking at the comparables and recent sales in the neighborhood it looks like this one is a good deal, our realtor has informed us that homes in the area generally go for about 95% of the asking price.  Our offer was closer to 96%.

 Back to my opening comment, “we’ve discovered that when you find a home that is a good value, someone else is probably discovering it too” I said this because often when we considered putting in an offer on a home, other offers were already made and or the seller accepted an offer before we decided to put ours in.  Generally, I am turned off to any hi-pressure sales tactic – if someone tells me that I should act now or I will miss the opportunity, I would reply with something like – well I guess I will lose it because I need to think about this for a while.  Unfortunately in our current marked conditions – I learned the hard way that I don’t have this luxury.   I was hoping the current housing market situation would afford better opportunities for a casual approach, but it appears not to be so.

When makeing an offer on the home you should be aware of the following terminology:

• Loan Commitment,  Approval Letter – This is basically a letter from a potential lender stating that they will offer you a line of credit for the purpose of purchasing a home, it will generally list an amount and a few conditions of the approval.
• Good Faith Estimate (GFE) – A estimated loan worksheet which shows estimated closing costs and fees and rates applicable to the loan.  This provides much more information than the approval letter.
• Sellers disclosures – Information provided by the seller stating the condition of the home and any history of repairs, problems or other conditions which a potential buyer should be informed of.  There may be things the owner is not aware of, especially if the seller is not the original home owner.
• Earnest money – Money that the buyer puts down when making the offer, this money is will go towards the home purchase price.  It is refunded if the offer is not accepted or if the contract is broken according to stated allowable conditions such as unresolvable issues arising during home inspections, etc.  If the buyer backs out of an accepted offer under terms not allowable according to the contract, the earnest money is given to the seller as a reimbursement for having taken the home off of the market during the contract period.