This is the fourth post in my series Albuquerque First TIme Home Buyers Guide.
So you’ve decided the time is right for you to buy your first Albuquerque Home. You’ve decided you how much you can afford, you've found the right house and now you’re ready to make an offer. What does that really mean, Make an Offer? Well it means you’re going to write a proposal. The proposal goes on a Real Estate Association of New Mexico (RANM) form called a purchase agreement.
The purchase agreement is a contract, and therefore you should think carefully through what you propose before you write it. Here are some of the things you need to consider to protect yourself when you’re ready to make an offer.
Making an Offer on an Albuquerque Home for Sale
Here’s what you’ll need to consider and maybe even negotiate when you make an offer on an Albuquerque Home.
Purchase price. How much are you going to offer? Should you just offer full price? I’d say not usually, unless the home just came on the market, it looks perfect, you love everything about it and it seems like it is priced to sell. In that case you might consider it, but usually there is some negotiating involved.
Since you are not an expert on the Albuquerque Real Estate Market, you’ll need the guidance of an Albuquerque Realtor to help you understand how the home is priced-is it priced to sell, or is it priced above the market? Realtors are working the market daily and should understand pricing. They should also understand what the current trends are. For instance, did you know that even the current buyer’s market houses are still selling for really close to list price? Read more about this in my post “Is it a Great Time to Make a Lowball Offer in Northwest Albuquerque.”
Closing Date. You may want to close quickly, but the seller may still be looking for their next place to live. Or perhaps their new job out of state doesn’t start for two months and they didn’t think their house would sell so quickly. You may need to negotiate on this to find a solution that works for everyone, or if negotiations stall, find another house.
Closing Costs. There are three types of fees that most people lump together and call “Closing Costs.” On the purchase agreement there are Loan Related Fees, Prepaids Required by the Lender and Title Company Closing Costs. All of these are negotiable, but depending on which ones you ask sellers to pay will make your offer more or less appealing. Although they are negotiable, there is a standard way that homes are sold in Albuquerque which is different from how they are sold in Santa Fe, or Denver or Tempe.
Inspections. There are many types of inspections you can have performed on a home. Take heart, if inspections reveal big problems, the contract describes how you will resolve them or how you can terminate in some cases and still get your deposit back. Different types of inspections are needed depending upon the home you are looking to purchase, but at the very least you should have a full home inspection and a termite inspection. It used to be standard practice on and Albuquerque Home Sale for the seller to pay for these inspections, but now many buyers are choosing to be more in control and pay for inspections themselves so they can choose the home inspection company. You'll also have to consider if you'd like to get a home warranty.
Repair Allowance. When you write the offer you will need to propose a repair limit. If the cost of repairs need on the house exceed this amount, you can either renegotiate the sales price or terminate the agreement and you may be entitled to get you deposit back. Why not write one million dollars in? Because the seller would never agree. You see, this is an escape clause for the seller too. If there are costly repairs that need to be done that exceed $1,500, for instance, the seller will also be able to terminate the contract as well. This might happen if the house needs a new roof and the seller doesn’t have enough cash to pay for it or enough equity to have it paid for at closing. Read more about roof issues here.
Offer Deadline. You’ll need to decide how long you are going to give the seller to consider your offer before they either accept it, reject it or make a counteroffer. Standard practice on an Albuquerque Home for Sale these days is 24 hours, although I’ve helped buyers set the deadline as short as four hours and as long as three days.
It may seem like a lot of decisions to make, but hopefully you’ve chosen a Realtor that you have confidence in to help guide you through the process. I’ve heard of real estate agents just flipping pages, having already filled in all the blanks and then saying “sign here," but that's not how I work. I never make decisions for my clients, rather I explain the pros and cons of their decisions so they can fully understand what they are getting into.
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