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MAKING AN OFFER - Outer Banks NC

We give our buyers money back at closing.   See details    Certified in Outer Banks Bank Owned Properties, Foreclosures, Short Sales, and Distressed Properties

Certified in Distressed Properties             Call 252-207-1147

STEP BY STEP - MAKING AN OFFER

Topics:

Talk to a lender

Find an agent

Area Knowledge

What you should know

Making the Offer

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Talk to your lender-

The very first step is to talk to your lender or ask your agent for a local lender they recommend to find out what you qualify for. Find out exactly what you can afford with a 30 year fixed loan on your actual household income in addition to the total amount of your debt owed and expenses.. This includes any monthly payments you may have with vehicles, credit cards, other loans, utilities...etc.  If you are visiting the Outer Banks to see some properties in hopes of putting in an offer, be sure to bring a pre-qualification letter with you and your check book.

 

Find an Agent-

Now you need to find an agent who will represent you. You need a buyer's agent and it is no cost to you! Do not let a seller's agent (the listing agent) represent you. The seller's agent has the seller's best interest in mind. If the agent can practice Dual Agency, then they will not be able to advise you in anyway on the terms of your offer.  Read more about Dual Agency in the Working with Real Estate Agents link below.

When purchasing real estate, you'll want to find an agent who is experienced to ensure you are protected and safely guided through a real estate purchase. When you have found an agent, he or she will provide you with a brochure titled Working with Real Estate Agents. This brochure explains the difference between a seller's agent, a buyer's agent, a dual agent and a sub-agent.  Please read this brochure carefully and ask your agent if you have any questions. Prior to making an offer, you must sign an agency agreement with your agent.

No consumer should have to pay a buyer's agent to represent them, the seller commonly pays the commission which is split betweent the seller's agent and the buyer's agent. Be sure to find an agent who has sold many properties representing the buyer only.

Area Knowledge-

When you are looking to purchase real estate on the coast, be sure you know the area well or find an agent who is very familiar with the area. For example: If an ocean front home is very affordable and seems too good to be true. That is most likely because it is. Some ocean front homes are located dangerously close to the tideline and most likely will not have the protective dune line covered with mature vegetation. Without this duneline, there may be problems including depreciating real estate value, high insurance expense, increased erosion of land, health department issues and higher risk of flood damage. Be sure to find out the cost of flood insurance and the history of flooding and damages prior to making an offer.

Prior to making the Offer-

Here are some things you need to know prior to making an offer:

  1. Comps-Be sure your agent provides you with recent sold comparable properties (comps) to justify the asking price or what you would like to offer.
  2. Cash Flow Analysis-You'll want to know how much this home will cost you or generate for you on a monthly basis. Have your agent prepare a cash flow for you..
  3. Fees/Assessments-Be sure the agent provides you with covenants, association fees or any pending or future assessments for condominiums or subdivisions with and HOA (Home Owner's Association) prior to making the offer.
  4. DOM-Find out how many days this house has been on the market and how many times it has been relisted.
  5. Original Asking Price-Find out what the starting price was compared to what it is now.
  6. Original Sold Price and Debt Owed-Most importantly, in addition to asking how much the seller originally paid for the property, ask your agent to research the debt owed on the property including any equity lines.
  7. Is it a short sale or a foreclosure ?
  8. Does the furniture convey?  What are the exclusions for any personal property in or around the premises.

The Offer-

All this information should give you the knowledge you need to make a smart offer:

  1. A pre-qualification letter from a financial institution stating you have been pre-qualified for a loan. This will be required with your offer along with the earnest money (and in rare cases a due diligence fee).  Be sure the lender writes the pre-qualification letter for only the amount of your offer.  The seller only needs to know you have been pre-qualified for that amount.  The letter can be adjusted if needed if you qualify.
  2. Decide on an offer amount after studying the most recent comps provided by your agent.  This amount is what the seller and the seller's agent will most likely be willing to work with.  Anything below market value will determine the seller's motivation level.
  3. Be prepared to submit an Earnest Money Deposit check. It should be about .5% - 1% of the offer price.   This money will be credited towards your closing.  If you are out of town at the time of the agreed and signed terms , be sure to put the earnest check in the mail THE NEXT day.  It must be recieved within 5 days of ratification of contract.
  4. Although very rare these days, sellers may try to negotiate a Due Diligence Fee.  This fee is written to the seller for putting the house Under Contract while you determine if you are going to purchase the house.  This includes inspection period, reviewing documents, getting a loan commitment...etc.  This Due Diligence Period can take as little as 14 days to 45 days.  If you decide not to purchase the house within this period, you can terminate without any reason and the seller keeps the due diligence fee.  The earnest money is still refunded to you in full as long as you terminate the contract PRIOR to the end of this Due Diligence Period.  The termination must be in writing, signed by you and delivered to the listing agent IN A TIMELY MANNER. Be sure you make a note of when your Due Diligence Period ends.  If you can't purchase the house for any reason at all (including being turned down for a loan) AFTER the Due Diligence Period expires, you can not get your earnest money deposit back, according to the contract.
  5. This Due Diligence Period can take as little as 14 days to 45 days.  If you decide not to purchase the house within this period, you can terminate without any reason and the seller keeps the due diligence fee.  The earnest money is still refunded to you in full as long as you terminate the contract PRIOR to the end of this Due Diligence Period.  The termination must be in writing, signed by you and delivered to the listing agent IN A TIMELY MANNER. Be sure you make a note of when your Due Diligence Period ends.  If you can't purchase the house for any reason at all (including being turned down for a loan) AFTER the Due Diligence Period expires, you can not get your earnest money deposit back, according to the contract.
  6. Due Diligence. This is when you discover everything there is to know about the property. Typically an appraisal and insurances are the only requirements when getting a loan but all of the below are highly recommended and are at the buyer's expense:
    • Home inspection
    • Pest inspection (termite)
    • Appraisal
    • Physical and elevation Survey
    • Septic inspection
    • Pool/Spa inspection
    • Elevator, fireplace, irrigation inspections
    • Whether the lot coverage/city/subdivision will allow a pool, additions, renovations
    • cost of repairs (although the seller is not required to make any repairs, you can still request them. If the seller does not agree, you must choose whether you want to move forward accepting the property as it is).
    • Cost of flood insurance-Depending on the location of the property, flood insurance can be a minimal cost or can be pretty substantial. Waterfront properties or properties close to the water can have the highest premiums and also may have restrictions on rebuilding or ground floor enclosures.  Be sure to find out the cost of flood insurance and if the policy is assumable. If you can assume the seller's current policy, it may save you money.
  7. Closing date-For a typical loan, it shouldn't take more than 45 to 60 days to close. Don't expect the closing to occur on the exact day it is scheduled. A closing could be delayed anywhere from a couple of days to a couple of weeks .
  8. Closing Attorney -You'll need the name of a local attorney your agent trusts and recommends. This attorney should keep you informed at all times. If you can, select an attorney who will be directly in contact with you.
  9. Competing Offers- The seller does not have to disclose if they are already negotiating with another buyer so you may be competing with someone without being aware.  Be sure to study the comps and put in a respectable offer if you really love the home.
  10. Be sure your agent reviews with you and you fully understand the terms of the offer. If you don't understand a term, don't hesitate to any questions.

If you have any questions, feel free to shoot us an email info@allaboutobx.com or call 252-207-1147.

 

Wende Pritchard Broker/Owner

All About OBX Real Estate represents buyers in Corova, Corolla, Duck, Southern Shores, Martin's Point, Kitty Hawk, Kill Devil Hills, Colington, Nags Head, Manteo, Rodanthe, Waves, Salvo, Avon, Buxton, Frisco, Hatteras, Ocracoke and Currituck. For a real estate broker that is experienced and specializes in Outer Banks Investments or Outer Banks Retirement locations, call us. We are the Outer Banks REALTORS that pays you back at closing to help you with closing costs. Are you in the market for a second Home or looking to Relocate? Call All About OBX Real Estate, 252-207-1147. For a Single Family Primary Residence, Condos, or Subdivisions with homes on the Ocean Front, Sound Front or Canal Front, we can help you find just the type of real estate you're looking for on the beautiful Outer Banks of North Carolina! Read More.

Contact All About OBX Real Estate on the Outer Banks now! info@allaboutobx.com or 252.207.1147
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