So, you've done your research, crunched the numbers, and finally made an offer on that dream investment property. Exciting times! But what happens next? Let's walk through the key steps and what you can expect after your offer lands on the seller's table.
The Waiting Game Begins
After you've made an offer, the ball is now in the seller's court. The contract should have a date and time of expiration. You will have to wait for their decision on pins and needles until that time is up. Delay doesn't always mean denial but the waiting game can certainly make you feel that way. The sellers will carefully review your offer, considering aspects like price, contingencies, other offers, and timelines. You must have patience in all things real estate and waiting on an accepted offer is certainly one of them.
Times Up
Several results are possible:
Acceptance - If the seller accepts your offer as is - congratulations but don't celebrate quite yet. Never celebrate until you have an actual check in hand. There have been times where a deal completely fell apart even after an accepted offer. This could be due to a number of factors such as financing or a negative inspection report among other things.
Rejected - Well, it certainly happens often. While it may seem that you will never buy property(ties), based on all the rejections. Sometimes it takes many rejections to get that accepted offer. Trust me, if you remain consistent and always hungry for more, these rejections will quicky turn to acceptances.
Counteroffer - If a seller is not pleased with an offer, you may receive a counteroffer with a new price, contingency, or something else. The seller will then issue you a date and time of the expiration of the contract. If you are still interested, you should review the counter and consider carefully on whether to proceed.
Due Diligence Period
Once your offer is accepted and all terms are agreed on, you enter the due diligence period. This is a designated time frame outlined in your contract to conduct thorough inspections, review documents, and ensure that the property meets your expectations. You can conduct the inspection yourself or you can hire a professional who will provide you with a more detailed picture of the condition & inadequacies of the property. They will crawl & peer in spaces that you may not even think of and provide you with valuable information to make an informed decision. It's crucial to be diligent during this phase to uncover any potential issues before finalizing the deal. If anything is found that you feel is a deal breaker, now is the time to withdraw from the contract without penalty.
Securing Financing
While you may have been pre-approved for a certain loan amount, securing financing for the specific property is another step. The sale of the property could still fall through if you don't have all your documentation or finances in order. Your lender will require a thorough appraisal of the property to assess its value and confirm that it aligns with the loan amount. If the property appraises for less than what the accepted offer is for, renegotiation or a withdrawal is in order.
Closing the Deal
Assuming everything checks out during due diligence and financing is secured, a title search will be conducted. The purpose of a title search is to see who has owned the property, when they owned it, and more. Most importantly, a search is done to ensure that the seller has the legal rights to sell it and and identifies whether there are any claims on the property. Title Insurance will ensure that if anything is missed during title search that you and the property or protected. Closing the deal typically involves signing a mountain of paperwork, transferring funds, and officially taking ownership of the property.
Post-Closing Matters
After the closing, there are still tasks to complete such as transferring utilities and potentially make any necessary repairs or upgrades to the property to name a few. If you're investing in rental property, you'll also need to start finding tenants before you finish renovations. This is sometimes not an easy task. Sure you can just get anyone in there but you don't want to have to go through tenant after tenant either. You want to be thorough in your search, conduct backgrounds checks, credit, etc. and ultimately start generating income.
In Summary
The journey from making an offer on an investment property to closing the deal is a multifaceted process that requires patience, due diligence, and careful negotiation. Each step brings you closer to achieving your real estate investment goals. Embrace the journey, stay informed, and soon you'll be reaping the rewards of your investment property.
Remember, real estate investing is a marathon, not a sprint. Enjoy the process and learn from each transaction to grow as an investor!
By following these steps, you can navigate the post-offer stage of investing in a property with confidence and clarity. Good luck on your real estate investment journey! Subscribe for more tips!
The contents of this article are the opinion of the author. Consider all legal considerations and thorough due diligence before venturing into real estate.
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