In preparing your contract we will need some basic information to get started, as follows:
- Names, addresses, phone numbers and email addresses for the buyer(s) and seller(s);
- Property address;
- Purchase price;
- Down payment, i.e. the difference between the purchase price and the amount of money the Purchaser is borrowing;
- Earnest Money, i.e. the money the purchaser puts into escrow with us to assure the seller that they are serious about going through with the purchase and in certain circumstances can be paid over to the seller if the purchaser defaults on the contract. We will hold the earnest money deposit in escrow until settlement, at which time it will be applied to the purchaser’s closing costs/down payment.
We recommend that you calculate the earnest money deposit on a sliding scale as follows:
|Sales Price||Earnest Money Deposit|
|up to $100,000||$1,000|
|between $100,000 and $200,000||$2,000|
|between $200,000 and $300,000||$3,000|
|between $300,000 and $400,000||$ 4,000|
|between $400,000 and $500,000||$ 5,000|
|between $500,000 and $1,000,000||$10,000|
These are just guidelines and whatever the parties agree on is certainly acceptable to us;
- The date of settlement. As purchaser’s generally must obtain a loan to purchase the property, the settlement date should be set out a sufficient amount of time to allow the purchaser to obtain their loan. Most purchaser’s have already spoken with a lender and obtained a “pre-approval” letter. The lender should be able to advise them how long they will need to process the loan in order to get to closing. If you need help locating a lender, we can provide you the name of at least three lenders we do business with on a regular basis. You will pick the one that’s best for your needs.
- What type of loan will the purchaser be obtaining? FHA, VA or Conventional?
- Will the seller be paying anything towards the buyer’s closing costs?
- Will there be a home warranty purchased as part of the process and if so who pays for it? We can obtain a home warranty company for you if needed.