You’ve found the perfect home and are excited to put in an offer. But maybe signing a contract makes you nervous. If so, that's normal. Know that the real estate contract and loan process is designed to protect you the consumer. Click here to learn how you can terminate a contract and get your earnest money back. In addition, to these built-in protections, we will do everything we can to negotiate terms upfront that work best for you.
Before we can put an offer in on a home, there are a few things we will need from you. Don't worry, we will contact the seller's real estate licensee to let them know to expect an offer. If there are no other offers on the table, this will buy us a little extra breathing room and ensure a good offer. If there are other offers, we will act accordingly.
Signers: Who is signing the contract? Please email us the full legal name of anyone who will be on the contract as well as their phone number and email address. The legal name has to match what is on your driver’s license as you’ll need to show your driver’s license or passport at closing and this name needs to match what is on the contract.
Initial offer price: What initial price do you want to offer for the home? We will review comparable nearby home listings and advise you as to our analysis of the home’s market value. Then, let’s have a discussion about the sale-to-list prices in the neighborhood as that will tell you a lot about whether you should expect to pay below asking price, asking price, or above asking price based on today’s market. In addition, you should keep in mind your ideal purchase price and comfort level with regard to your future monthly loan payments.
Your walk away price: What is your walk away price? Don’t expect to pay your initial offer price as it’s extremely rare for a seller to accept your initial offer without some negotiating back and forth. In addition to deciding what offer you want to put in to start, you need to decide now how much you’re willing to pay for this property and what your walk away price is before things get heated and emotional.
Closing date: What date would you like to close? Typically, in Anchorage, closing takes place about 45 days from contract acceptance. Sometimes you can ask for a longer closing date (60-90 days), but don’t expect it to be granted. Therefore, if you want to move around July 1, plan on putting in offers early in May. While some local lenders we use can do closings faster, most lenders can’t close that fast and need 30-45 days. If you want to close faster than 30 days, please let me know. If you cannot attend closing, we need to know that 2-3 weeks in advance so we can ask the lender to approve a Power of Attorney so a family member or your attorney can sign the documents on your behalf.
Closings only take place Monday-Friday. They cannot take place on weekends or bank holidays when the banks are closed. We don’t recommend closing on a Monday as Monday closings increase your chances of wire fraud issues. Usually we cannot specify a specific time for the closing as that depends on when the title company is available so plan to be available the entire day as a closing time won’t be assigned until 2-3 days before closing. Closings can take place anytime from 9 am-4 pm and usually take 2-3 hours.
If you’re not applying for a loan and are paying 100% cash you can close within just a couple of weeks.
Earnest money: How much earnest money are you comfortable putting down on this property? Typically, contracts in Anchorage ask for 1% of the purchase price as earnest money. The earnest money is part of your down payment. Therefore, if you’re planning to purchase a home for $500,000, you should expect to pay $5,000 in earnest money. This payment will be applied to your down payment at the closing. If you owe $50,000 for a down payment, then you would only need $45,000 at closing. Under most circumstances, if the contract is terminated, you can get earnest money back.
Down payment: For the contract, we need to know how much you’re going to put down for your down payment as discussed with your preferred mortgage lender.
Closing cost credits: Do you want to ask the sellers to pay any of your closing costs? Generally, the sellers pay their closing costs and the buyers pay their own closing costs, however, we can ask the sellers to pay some of your closing costs on top of theirs, if needed.
Home warranty: Do you want to ask the seller to provide a home warranty on the property? If the property doesn’t have multiple offers, we always recommend asking the seller to provide you with a one-year home warranty. Depending on the type of property you’re buying, this usually costs the sellers about $500, but could save you money on unexpected repairs during your first year of home ownership.
Title Insurance: In Alaska, we do not commonly use attorneys as part of the real estate transaction process. Instead, homebuyers, homesellers, and mortgage lenders rely on title companies to ensure that properties are clear of title defects for new ownership. If you take out a mortgage loan, your lender will require a loan policy of title insurance to be paid by you. In addition, you can also request an optional homebuyer’s title insurance policy at the seller’s expense which we recommend to protect your interest in the property. If you have a preferred title company, we can include this in your offer. Clear title reports protect the lender’s interest in your property until your loan is paid off or refinanced. For you, clear title reports insure your ownership rights to the property. Title reports include a thorough, but not exhaustive research of liens, encumbrances, or defects in title or actual ownership in property and protects against claims for past occurrences. Title insurance is paid upfront and as a one-time cost. Other than supplying your title officer with additional information, there is typically not much you will need to do to facilitate this step in the homebuying process. As soon as your title is cleared by your title company, your title officer will inform the mortgage lender getting you closer to closing on your new home.
Do you want to request homebuyer’s title insurance? If so, the seller will be responsible for ordering and paying for it. If you have a title company that you would like to use, please let us know as we will need to include them in the offer.
Bill of Sale: If the seller included a bill of sale of personal items that they are willing to leave with the property, you can decide which items you would like to accept or not as part of the sale price. If a bill of sale is not included, but there are items you would like to remain with the property you may draw up a bill of sale and include it in your offer. Typical items included in bill of sales are home theatres, wall-mounted flat screen TVs, hot tubs, furniture, dog kennels.
Home Inspection: If you have a licensed home inspector that you would like to use, please let us know as we will need to include them in the offer. Otherwise, we will use someone from our professional network of highly recommended service providers.
Survey:If the property does not appear to have a survey that is accurate or recent, you may want to require a new one as part of the offer. A new survey would show property lines in relation to fencing or buildings as well as easements that may be of concern. A title company may also require a survey if you do not.
Carpet Cleaning: Would you like the seller to have the carpets cleaned before you close and move in?
Contingencies: Any other contingencies we need to be aware of? Do you need to sell your current home before we can buy this home?
Signing the Offer: Once we’ve talked through the above and you’ve emailed us your answers, we’ll write the contract and have you sign it via DigiSign. We’ll then submit it to the seller’s licensee.