Go In Strong Or Go Away Empty When Buying Homes In The Triangle

Go In Strong Or Go Away Empty When Buying Homes In The Triangle

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To call the Raleigh area real estate market "hot" would be an understatement.   It is becoming almost a regular occurrence for a home in Cary or Wake Forest to have multiple offers on it.  Don't be shocked if you are buying a home in Apex or Holly Springs and have to go slightly over asking price to "win" the home against another buyer.  If it is a nice home in Fuquay Varina or Clayton and it has been on the market over 2 weeks, it will probably go under contract before it hits the 3 week mark.....especially if it is under $250,000.  The market in the area is moving and moving fast and when you put in an offer on a home, you have to make sure it is a strong one.

There are many different parts to a Offer to Purchase that can be changed or negotiated between buyer and seller.  If purchasing, you may ask for appliances to be left with the home or for the seller to pay for a home warranty for the first year on the home after the sale.  The seller could request to live in the home for a few days after the close of the sale on the property.  In my experience however, most contracts are accepted by sellers or denied over three main areas: Due Diligence Deposit, Closing Date, and Net Proceeds.

The due diligence deposit (DD$) is not something that every state has and the concept was new to the North Carolina real estate transaction back in 2010/2011.  The DD$ is a deposit that the buyer offers directly to the seller at time of contract acceptance in order to buy an amount of time for the buyer to perform their due diligence on the home.  During this time frame (which is also negotiated on the contract), the buyer is given access to the home to perform the vary investigations on the home such as home inspections, survey, appraisals, termite inspection,...... and for this time period and access, the seller is compensated with the DD$.  This check is written to the seller and once received, they can cash it and that money is theirs.  It is a non-refundable deposit in almost all circumstances.  DD$ is fully credited to the buyer on the transaction at closing.  It is obvious why this deposit can be seen as a valuable part of the contract.  The seller is paid this amount upfront for agreeing to the contract and they get to keep it, even if the buyer ends up walking away later in the process or if the financing should happen to fall through for the buyer.  This money is like an insurance policy to the seller to show how serious the buyer is about purchasing the home.  As a buyer, you need to understand that this deposit is gone at the execution of the contract.  Just like the time you are buying with it, you can not get it back.

The closing date is the second part of the equation that tends to be very important to the seller.  This is the date that the home actually changes hands from seller to buyer and a new deed is recorded with the buyers name(s) on it.  The seller may need 45 days to get out of the home based on their schedule and where they are moving to.  They may already be living somewhere else and want to close on the sale of the home as quickly as possible, so a 30 day closing time frame may be more desirable.  Having flexibility in the offer as a buyer and being able to close rather quickly or take a longer time can be a very advantageous thing when it comes to meeting the sellers needs.  Another offer may come in $5000 more than your offer but if the seller needs another 60 days before their new construction home is ready and the $5000 extra offer can't wait that long, then your flexibility to give the sellers the closing timeframe they need in your offer could be the difference in what wins the home or not.  Presenting an offer to the sellers based on what works for them can be crucial in securing the home for you.

Finally, the most obvious condition of the contract and typically the one that carries the most weight is the Net Proceeds to the seller.  This is what you may refer to as the seller's "bottom line".  After all the numbers in the contract are hashed out and everything that is being asked for or not from the buyer, what is the bottom line amount of money that is truly being offered to the seller?? For example, if you as a buyer are willing to give the seller their full asking price but are also asking for them to pay closing costs of $4000, then you really are only offering them a net proceed amount of $4000 less than their asking price.  Lots of buyers get caught up in the fact that the early numbers of the contract are at asking price but then throughout the contract, they are asking the sellers to pay closing costs, to leave appliances, pay for a warranty, and to repair things upfront.  All of this is normal and part of the process but don't be fooled into thinking that the sellers don't take into account all of this and in their mind are deducting it from their "bottom line" which is how much they are going to walk away with at the closing table.  

There are over a dozen different negotiable items in a North Carolina Offer to Purchase contract for real estate.  All of them are important but when it comes down to it, the items of Due Diligence Deposit (money up front in the sellers pocket), closing time frame, and Net Proceeds (seller bottom line $$$) tend to be the most important.  Our team at the Kima Real Estate Group is here to help you navigate this journey and to make sure that whether you are buying or selling, protecting you and your money is our number one priority and that you end up with the best real estate experience that you have ever had.  Give us a call today and let us show you what makes us different and why you should allow us to represent you......919-443-0200.


Chad Wingler Headshot
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Phone: 919-323-2616
Dated: April 17th 2017
Views: 232
About Chad: Buying a new house is one of the largest steps a person makes in their life; emotionally, physically...

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