Offer Options

– escalator clause

The offer amount can be considered a starting point. If there are competing offer/s with a purchase price more than your offer, the escalation clause will automatically increase your offer. The escalation clause will state what amount the offer will increase above any competing offer and the maximum the offer will increase to. It is important to be comfortable with the maximum amount on the escalation clause.

This gives the buyer an option to be competitive with some flexibility regarding the amount offered.

– earnest money

Earnest money is usually about 1% of offer amount. 2% or more shows the seller you are in it to win it and less likely to walk-away.

– seller has a right to cure

This gives the seller more control should the home inspector find defects.

– money towards the found defects in home inspection

Buyer to be responsible for up to the first $TBD of any defect/s noted in the home inspection report. This softens the contingency for the seller. Also, the seller is not concerned that buyer will walk-away for a “small amount”.

– money towards appraisal shortfall

Buyer to be responsible for $TBD, should appraisal come in lower than the accepted offer amount. This amount would be delivered to the title company by way of check or wire transfer. Please remember this is like paying more cash above the accepted offer amount.

– no tax pro-ration (or not all tax pro-ration)

Typically the taxes are prorated up until the day before closing and credited to the buyer at closing. This option eliminates that pro-ration/credit (or some of it). The seller takes home more funds in the amount of that credit.

– gap endorsement

Buyer to pay gap endorsement (estimate $150). Typically the seller pays this. It isn’t a lot of money, but it does help show how you are going all in.

– seller post-closing occupancy

If the seller is given post-closing occupancy, no occupancy charge. This is usually calculated using your monthly payment amount divided by 30 days to equal a per diem amount multiplied by the days of occupancy. Usually the first mortgage payment is at least a month after closing. So, if the occupancy is less than a month, the buyer is not out any money.

– less than 20% down

This one is for the buyer. If 20% down to eliminate PMI is the goal, that is an excellent plan. But, if this leaves buyer with no or little funds left to do repairs, updates and/or remodeling, it can limit the pool of homes.

– title insurance

Buyer to give seller a credit at closing of $TBD towards “owner’s policy of title insurance”. Typically in the offer it states that the seller is responsible for obtaining and paying for the free and clear title. Buyer could offer to pay for the title or a portion of it. The seller takes home more funds in that amount.

Contingencies, offer options, and more...oh my. We are here for you and together we will get you in your new home.