When you receive an Offer To Purchase, you are likely to focus on the price. You might be ecstatic over a full price offer, but you should be aware how "contingencies" could affect the likelihood of success.
Almost every offer has a mortgage contingency, stating that the buyer will secure financing at a certain rate and for a certain term. Make sure these factors are realistic. A buyer seeking a 30-year loan at 4% with no points may be hedging their bets if your agent advises that these loans are typically written at 7% with 1.5 points. Unrealistic terms can allow the buyer to back out if they get cold feet or find another property they prefer.
Another sticky contingency more common these days is when a buyer states that they must sell their home before they can finalize the purchase of yours. There has to be a realistic time limit, so the buyer doesn't tie up your listing.
It's wise to respond with a "kick-out" clause that allows you to keep your home on the market while the buyers promote theirs, offering them a 72-hour period to fulfill the contract if you should receive another offer in the interim.
These two examples are just the tip of the iceberg, so sit and discuss each line of the offer with your agent before making your decision.
Larry Weichman is President/ Broker for Costa Mesa based Weichman Realtors. His company has served Costa Mesa since 1976. Larry has over 15 years of experience in Bank Repos and Short Sales and non foreclosed real estate, his clients include General Electric Mortgage, Home Savings, Associates Finance, Transamerica. Current clients include Bank of America, Ocwen Financial Corporation, Countrywide and Keystone Asset Management to name a few. He has sold real estate since 1976 and is a 3rd generation Real Estate Broker. Larry has closed escrow on over 1,100 properties; from townhomes to commercial buildings. Please be sure to visit us on the Internet at www.TeamWeichman.com, www.OCHomeTracker.com or www.OCRepoBroker.com or you can call him at 714-241
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