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Tips on Writing Purchase Offers for Repo Homes



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By : Joseph B. Smith    99 or more times read
Buyers of repo homes need to make sure that their purchase offer document is done correctly. This is important to protect the interest of the buyer and to also make sure that he will not be surprised by requirements that have not been agreed on earlier.

When making a purchase offer, there are several important issues that buyers of repossessed homes should focus on. To better understand what it entails to make a solid purchase offer, here are some tips.

1. Specify the price. The actual amount that you are offering should be clearly specified in the purchase offer. Merely saying that you will top the highest offer is not enough and is not legally binding. The actual dollar amount should be written in the offer document. It is advisable to specify an amount slightly lower than what you are willing to pay to give you more room to negotiate.

2. Make it clear how much the down payment would be. The amount of down payment you are willing to shell out should also be specified in the purchase offer. There are certain areas in the U.S. that require verification of this down payment, so you cannot just put down an amount to sway the seller since this amount will be verified. In most states, a grace period is provided for the buyer to issue the down payment he has specified in his purchase offer.

3. Disclose the financing package. It is important to let the seller know from where the money that will be paid to them will come from. Is it a mortgage loan from a bank, a government agency-issued financing, VA loans or some other financing scheme? They will also require proof that you do have financing since buyers that have this ready are always the ones given priority.

4. Make the contingencies clear in the document. Homebuyers, including those purchasing repossessed properties, are legally provided with a certain number of days to inspect the homes. Make sure that you specify in the document that your offer price is still dependent on appraisal, inspection results and other areas that may affect the actual value of the property. If you do not specify these contingencies, they will be considered waived and you will have no right to negotiate for a lower price should you find out after inspection that repair costs are way too high.

5. Determine who will pay the fees. There are a number of fees that need to be paid before the deal is closed. Make sure that it is made clear who will be responsible for paying the title fees, transfer taxes and other charges. In some cases, these fees are deducted from the actual selling price, while in others; they are the responsibility of either the seller or the buyer.

6. Ensure that time of possession is clear. Be sure to spell out the provision for possession. Can the buyer possess the priority right after closing? Or would it be a day after closing? Regardless of when it would be, it is important to specify it in the document when you make your purchase offer for repo houses.
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