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Old 04-13-2009, 09:27 PM   #1 (permalink)
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Default Questions on buying a New Home

So we're thinking about a second home in the mountains and came across some questions:

1.) Our agent claims that if we put in an offer and it gets accepted, then we have a 17 day period for home inspection and miscellanious activities...at the end of these 17 days we can pull back our offer need be and suffer no consequences or penalties.
-My dad is pretty skeptical about this whole 17 day "grace period" if you will, specially since he hasn't heard of it before. Does this sound legit? Can we really retract our offer and not lose our deposit or get some other penalty?

and

2.) Our agent also said that we have to write a check of 5% of our offer price as a deposit. My dad remembers paying alot less for another house that cost alot more so he's also skeptical of this. I realize this is probably a state thing but does 5% of the offered price sound about right or too much to you guys?

Keepin' my fingers crossed that we finally get a cabin
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Old 04-13-2009, 10:44 PM   #2 (permalink)
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1) sounds correct

2) good faith deposit is usually 1-3% in CA

mpdsnowman: He is referring to an earnest money deposit, not the down payment.
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Old 04-14-2009, 04:27 PM   #3 (permalink)
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Don't know if this helps as I'm not sure where you're from:

1) The home I bought recently had a 21 day period to show proof of financing and the home inspection.

2) 5% for a deposit is ok, it really depends on what the seller wants as they can dictate the terms. Good way of weeding out the non-serious buyers, but not the best way to sell a home quickly. It does seem a bit high though (our deposit was 5K on a 300k home) but it's not illegal in any way.
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Old 04-14-2009, 04:40 PM   #4 (permalink)
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I just bought a house less than a year ago. Let me tell you that a LOT of that hocus-pocus fine print crap is all in the contract. If you find your agent is ful of shit, drop him like a bad habit. He probably just wants to make a sale in this shitty economy, and will tell you anything he can to make you pay.

Let me also tell you that many housing laws vary from state to state. I didn't have any 17 day limit crap on my offer. It was in the fine print on the formal offer form.

And if you're the type who can help himself (i.e. You use the search function instead of starting a topic 'Need help choosing a new board.'), then go to:

The Mortgage Professor's Website

I'm not kidding about this. Read it and go into your negotiations swinging instead of bent over. It answered 95% of my questions. It can be a long read, but it doesn't take anywhere near as long as it takes to pay off a shitty mortgage because you had no idea what you were doing.
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Old 04-14-2009, 05:04 PM   #5 (permalink)
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The Grace Period is a standard clause to see in housing purchase agreements. It gives the potential buyer time to inspect the place and get their financing in check. The amount of time can depend on state law of what is agreed upon between the parties but anywhere from 2-3 weeks is normal.

5% is a lot to put down but again this depends on your states laws. 2-3% is more common
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Old 04-14-2009, 05:22 PM   #6 (permalink)
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just got a new condo 2 br 2 bath with garage for 190K !! schwing my 3rd property, might move into this one and rent my current home. Dude I got a killer deal.
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Old 04-14-2009, 05:33 PM   #7 (permalink)
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Quote:
Originally Posted by hm1sfidc View Post
just got a new condo 2 br 2 bath with garage for 190K !! schwing my 3rd property, might move into this one and rent my current home. Dude I got a killer deal.
I hate you. A place like that is still in the high 300s here.
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Old 04-14-2009, 05:41 PM   #8 (permalink)
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Quote:
Originally Posted by Enigmatic View Post
So we're thinking about a second home in the mountains and came across some questions:

1.) Our agent claims that if we put in an offer and it gets accepted, then we have a 17 day period for home inspection and miscellanious activities...at the end of these 17 days we can pull back our offer need be and suffer no consequences or penalties.
-My dad is pretty skeptical about this whole 17 day "grace period" if you will, specially since he hasn't heard of it before. Does this sound legit? Can we really retract our offer and not lose our deposit or get some other penalty?

and

2.) Our agent also said that we have to write a check of 5% of our offer price as a deposit. My dad remembers paying alot less for another house that cost alot more so he's also skeptical of this. I realize this is probably a state thing but does 5% of the offered price sound about right or too much to you guys?

Keepin' my fingers crossed that we finally get a cabin
what state are we talking about? everything varies from one state to another.
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Old 04-14-2009, 07:50 PM   #9 (permalink)
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California.

We're actually lookin at two different cabins...one is practically a shack but its RIGHT across the street from Bear Mountain with a bomb view of the slopes, its pretty cheap, 1 bed room, 1 bath and we can afford it without my pops sweating and my mom stressing, somethin like 200 grand give or take a few decagrands

The other one is in the so-called "Beverly Hills" of Big Bear Lake and a WAY sicker home, 4 bed rooms, 4 baths, extremely nice/huge upper room with amazing kitchen, 5 separate decks, views of the lake and snow summit, at the end of a culdasack, it sold back in January for 1.2 mil but now its bank-owned so that puts it in our longbomb striking distance of 665,000. But allegedly theres an offer on it as we speak so the agent is trying to get us to drop an offer then worry about financing.

So yeah, just trying to get informed so I can help my parents out since they work all day and don't have as much time as I do for research.

Thanks for all the input, great advice, and munkyspunk that looks like EXACTLY the site I've been lookin for, I'm deffinitly peepin it once I get home
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Old 04-14-2009, 07:59 PM   #10 (permalink)
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California.

We're actually lookin at two different cabins...one is practically a shack but its RIGHT across the street from Bear Mountain with a bomb view of the slopes, its pretty cheap, 1 bed room, 1 bath and we can afford it without my pops sweating and my mom stressing, somethin like 200 grand give or take a few decagrands

The other one is in the so-called "Beverly Hills" of Big Bear Lake and a WAY sicker home, 4 bed rooms, 4 baths, extremely nice/huge upper room with amazing kitchen, 5 separate decks, views of the lake and snow summit, at the end of a culdasack, it sold back in January for 1.2 mil but now its bank-owned so that puts it in our longbomb striking distance of 665,000. But allegedly theres an offer on it as we speak so the agent is trying to get us to drop an offer then worry about financing.

So yeah, just trying to get informed so I can help my parents out since they work all day and don't have as much time as I do for research.

Thanks for all the input, great advice, and munkyspunk that looks like EXACTLY the site I've been lookin for, I'm deffinitly peepin it once I get home
go for the one bedroom. later, down the road, you can level it and re-build your man palace.

best of luck with the purchase.
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