It’s taken more than a year of talking about it, research & reading, but this afternoon I’m going to attempt to sound like I’ve made offers on houses before.

Tangent
Funny thing about the web is that even though it’s probably the first place people check for information, the pages that are often referenced are much like this one. As a reader, you have no idea what my background is, but, if there’s something in here that fits what you’re looking for this blog could end up serving as an unofficial (probably unmentioned) resource. I’ll agree that using this site as an example could be a bit far fetched, but blogs seem to have worked their way into almost being a valid source of information (for the most part, probably as valid as the articles or studies mentioned during happy hour conversations). So please, take the stuff below with that grain of salt.
/Tangent

Getting back to the offer, based on the stuff I’ve read, these are the things that should be on my side of the offer table:

The Offer Letter Offer letter should contain

• the buyer(s) name,
• owner(s) name,
• a short description of the property,
• offer price (broken down into (i) any earnest money given; (ii) amount of deposit due upon signing sales agreement; (iii) balance due at closing and (iv) the total of i-iii,
• Conditions and terms of the offer that (from what I’ve read) include
  1. This offer is subject to Buyers transitioning pre-approval to a real estate mortgage for no less than $[mortgage amt] payable over [#years] years with interest at the prevailing rate and customary terms with a firm commitment thereto on or about [date].
  2. The offer is further subject to Buyer obtaining (i) a satisfactory home inspection and engineering report, (ii) independent appraiser’s report and (iii) termite/pest report within [x] days hereof.
  3. Said property is to be sold free and clear of all encumbrances, by good and marketable title, with full possession to said property available to Buyers at date of closing.
  4. The closing date shall be set on contract, and finalized at the public recording office, unless such other time and place shall be agreed upon.
  5. This offer shall remain open until 12 o’clock, A.M. (midnight) [dated 3-7 days after dropping the offer] and if not accepted by said time, this offer shall be deemed rescinded and all deposits shall be refunded in their entirety.

A Comparitive Market Analysis
This is basically a list of properties that have sold in the immediate area of the property you’re looking to purchase. Using the links under the Real Estate QuickLinks are to the right, you should be able to dig up more information than the broker will have on hand (or want you to have on hand). The following information is what I included in the CMA that I’ve done for each of the properties that I’ve considered purchasing:

• Full address of the comparison property (with a picture)
• Zoning and Building Class (used it for multi-family)
• Gross, residential and lot square footate
• Building and Lot dimensions
• Price paid per square foot as well as the price per square foot of the last city/town assessment
• Price that the property sold for (and the date) as well as the distance to the property you’re looking to purchase
• A summary listing the differences and averages etc.. of the property you’re looking to buy and the property you’re comparing it to.

Pre-Approval
I’ve been told in the 1-2 day classes that I’ve gone to during the last year that pre-qualification isn’t really worth the time it takes to fill out the form on the lenders web page. Why? None of the information that you give is checked out. The banker/broker runs the numbers that you gave and based on what you said (and nothing else) says that you can afford a $[x] mortgage. Pre-aproval requires you to submit documents to back up your claim to cash. I’ve been asked for prior tax returns, bank statements the last month of pay stubs, quarterly statements from investments – basically if you mention it, you should have some sort of documentation to back up that it exists.

Your checkbook
When markets are as competitive as they are right now (in NYC) sellers often have their pick of potential buyers. One method used to stand out is to offer Earnest Money with the offer. This money is applied to the overall cost of the building and is later considered a part of the downpayment. After gathering up everything above (or whatever you think you need), I guess it’s just a matter of the pitch to the seller. Hopefully in a few hours mine will be convincing enough to get me out of the apartment I’m living in and into something that I can actually move into.

Quantum Mechanics: The dreams stuff is made of.