Making an Offer: Glossary of Key Terms

By mark-slade November 28, 2012

Once you have determined that you want to make an offer, you need to know the following Components:


EARNEST $: Needs to start with a check made out to your ABR’s Agency for what we call EARNEST $. This check is a key ingredient in that it validates your offer with the idea that $ is already behind it. This money, ranging from a minimum of $1,000 and up to $10,000, is deposited into a non-interest bearing escrow account and is “a part” of the total “cash” being put down toward your purchase. So if you are putting $50,000 down, you need to bring $49,000 more to fulfill the cash portion of your offer.

MONEY DOWN: all too often, buyers feel is all about the numbers in winning the home. Actually, an offer that wins may win with less of a purchase price if there is more money being put down (making it appear more likely the mortgage will be approved, while also putting “more skin in the game,” as it is often referred to when submitting an offer as compared to a buyer that is putting “less down.”

TIMING: This is a tricky one. 1) CLOSING DATE: When a property is vacant, then a quicker closing time and a corresponding mortgage commitment date is usually much preferred by a seller. How long till you contractually project till conducting a home inspection can also effect a seller’s reception of your offer, the longer you wait when you know something could be found and then negotiated the more uneasy a seller may feel; conversely, a projected quick Home Inspection usually is an earmark for a quick close and that may work to your advantage, unless the seller isn’t looking for a quick close. So, it’s best to try to get some advance knowledge as to a preferred closing date in advance of writing your offer. 2) MORTGAGE COMMITMENT: A good lender can get you a mortgage commitment is as few as 14 days, provided you have quick access to all the necessary forms—tax returns, pay stubbs, etc. 3) My recommendation is to follow this pattern CLOSE/COMMITMENT (days/days): 30/21; 45/30; 60/40; 75/45; 90/60.

CONTINGENCIES: there are several contingencies that you already have in a standard contract and others that you need to advise as they can dramatically influence a seller’s receptivity to your offer, as follows:

i. HOME SALE CONTINGENCY: Do you have a property to sell before purchasing the one you are planning to buy? Having a home to sell will probably exclude you from consideration for a good third of all sellers; it can sometimes be offset with presenting a higher offer that helps to put the risk in proper context as if you don’t close on the property you are selling then the seller of the home you are trying to be will have held their home off market and jeopardized what they could eventually achieve with a sale.

ii. MORTGAGE CONTINGENCY: if you need a mortgage to buy a home, there is nothing you can do to eliminate this contingency; it also can work as a safety check as an appraisal will have to be performed before you get your mortgage commitment and that will either attest to the fact that you paid too “little,” too much or just the right amount for your new home to be.

iii. HOME INSPECTION: You have the right to hire a home inspector(s) to evaluate the home of your choice, you will want to inspect your roof, the stability of your construction, your electric supply and outlets, your plumbing where visible, your heating system, your hot water system, lead paint (see below) and wood destroying pests and animals. Most inspectors can cover virtually all of these aspects, or they can bring specialists in to augment their inspection. I highly recommend your Home Inspector have the ability to understand and evaluate the engineering aspects of your home as spending a little more up front can often offset a much more significant cost to bringing in an engineering specialist at a later date.
iv. LEAD PAINT: If the home you plan to purchase was built prior to 1978, then you need to be aware that Lead Paint may have been applied to some portion/parts of your home at some point. As a result, you have the right to hire a home inspector(s) who can either perform a Lead Paint Test or a specialist to evaluate the home of your choice to make sure you don’t have easily accessible lead paint.

Mark Slade
Keller Williams
Good Homes

Selling a Maplewood/South Orange/Millburn/Short Hills area home involves many steps and having an experienced Maplewood New Jersey Real Estate Agent and Realtor®, specializing in the Bedroom Communities of New York City in Essex/Union County— Millburn, Short Hills, Montclair, West Orange, South Orange, Livingston, Maplewood, Springfield, Summit, Madison, Chatham, Scotch Plains, Fanwood, Cranford and Westfield–by your side will make the transaction run a lot smoother. I would love to be your Maplewood/South Orange New Jersey Area Real Estate Professional! I assist both buyers and sellers in the Bedroom Communities of New York City, mostly served by NJ Transit’s Mid-Town Direct Train Lines, offering commutes of 45minute or less to NY Penn Station, with either the purchase and or sale of residential real estate.

As an Accredited Buyer’s Agent (ABR), I have received special training to guide and educate you through the entire home buying process. From start to finish, I listen to your needs and desires in what you would like and take the information you give me to find you home. My GO-TO team can provide you the best in Real Estate advice with regard to attorney choices, Home Inspectors and Mortgage Loan Officers

As your Maplewood/South Orange/Millburn/Short Hills/Essex/Union County New Jersey listing agent I am well versed on as your local expert in all things in the Maplewood and South Orange area Real Estate Market. You can expect personalized service that includes a detailed consultation on how to best position your Mid-Town Direct home to be competitive in today’s market with training to provide my clients with an in-depth Advanced Comparative Market analysis, and advice on staging. As my office’s technology officer as well as both a Zillow Platinum Premier and Trulia Premier agent, I use the latest and most up-to-date marketing methods to get your home in front of as many buyers as possible. Being your New Jersey Real Estate Agent and Realtor ® not only involves just finding the home or selling the home, but being your guide, negotiator, advisor and advocate and making sure that your needs and goals are met. Being your New Jersey Essex/Union County area Realtor® (with a little bit of Morris County thrown in for good measure) is one of my truest passions, and “Helping You Find Your Dream Home” is my number one priority.