Purchase contract features
If you need to obtain financing, it is important to make the purchase contingent upon receiving suitable financing. This insures return of the earnest money deposit to the buyer, in the event that the buyer cannot obtain financing in the time frame specified.
You can include a built in counteroffer clause. If you are anticipate that you may not be the only party submitting an offer on the property, adding a clause with wording similar to, "In the event that seller receives multiple offers, the buyer agrees to pay X amount of dollars over highest offered price, up to a max price of Y." You should discuss the pro's and cons of this clause with your agent because there are downsides to including it. One downside to including this clause in the residential purchase contract is that the seller may perceive you as being overzealous in your desire to purchase the home and that may lead to a higher counteroffer asking price.
Obtaining Financing
I would refer you to my articles descibing the various pros and cons to different loans such as (ARMS, Fixed Rates, Option ARM's, etc). Included are some of the questions a borrower should ask when comparison shopping for a loan.
Get your credit score as high as possible, your interest rate and likelihood of being qualified increase significantly with a higher credit score. If possible, payoff as much debt as possible, such as those 200 balances on that department store card you signed up for to get the advertised discount. Do this as early in the process as possible, it takes a while for these changes to your debt ratio to be reflected in your credit report.
Get preapproved by a lender or mortgage broker. This makes you essentially a cash buyer with a lender agreeing to approve you for a loan, barring any unexpected changes to your financial situation situation. Its also a good way to find out how much you can afford before you waste time and energy looking at homes out of your price range. A good preapproval letter will contain the following information: amount of loan, interest rate, contact information for mortgage broker or loan officer, and date letter was issued (typically letters are deemed reliable for 30 days max).
Find a lender or mortgage broker. A good loan officer will provide all the information that you (the borrower) need to make an informed decision about which loan to choose. And will also assist you with doing everything in the power to troubleshoot potential obstacles that occur during the processing of the transaction. Also, many lenders offer information that helps buyers to compare loan types.
About the Author
Kevin Fenderson works as a Realtor for Hilltop Realty based in Santa Ana, Ca. He writes regularly for newschoolrealestatemarketing.com. If you have any questions or comments please visit his website.
