A Gen-Z's Guide to Life and Real Estate

Not too long after beginning your real estate search, you will likely come across a property that you will want to pursue. There will likely be emotions, dreams, and plans running through your head when you get to that point, but there are a few steps to go through before you achieve your goals. The first big step – writing an offer on the home.

For the sake of keeping this post on the shorter side, we will just be touching on the main topics of the offer to purchase for the State of Wisconsin. Of course, your agent should be sitting down with you to go through the entire offer. After all, it is a legally binding contract likely for hundreds of thousands of dollars and my gosh, you should know exactly what it is you are signing and how you can put yourself in the best position possible to get an accepted offer.

1. The Address of the Property: Of course!
2. Purchase Price: Well… How much are you going to pay for the property?
3. What is Included and What is Excluded in the Purchase Price: Most of the time, the bigger appliances that are not considered fixtures go here. Examples: Refrigerator, Range/Oven, Microwave, Water Softener, etc… The seller’s personal property is excluded, more often than not.
4. Binding Acceptance: What timeline are you going to give the seller to accept your offer in order for it to be a binding contract?
5. Closing Date: On what date does the ownership and occupancy transfer from the seller to you, the buyer?
6. Earnest Money: Yes, Wisconsin is an earnest money state! Think of earnest money like a sign of good faith in your transaction. Earnest money is the amount of liquid capital you are willing to put into the deal, typically within five days of acceptance of your offer. Unless otherwise specified, this money is likely to be held by one of the three: listing firm’s trust account, buying firm’s trust account, or a title company’s trust account. This money cannot be touched by any of the parties unless a proper disbursement agreement has been completed by both the listing, and buying parties. At the end of the deal, assuming you make it to closing, this money is rolled into the amount due from the buyer at the time of closing.
7. The Inspection and Testing Contingencies: While there are many things that can be tested or inspected throughout a real estate transaction, we will cover the big four. 1. Home Inspection. This is when the buyer brings in a licensed home inspector to inspect the property and find any defects. This typically costs in the neighborhood of $400-$500 depending on size, age, and location of the home. 2. Septic Inspection. Very similar to the home inspection, but focused solely on the septic system’s condition. 3. Well Inspection and Well Water Testing. Again, very similar to the last two, but focused on the condition of the well. Water samples will be taken at this time before the results are delivered back to the buyer. 4. Radon Testing. Done typically during the home inspection, an inspector/tester will bring in a device that takes radon readings typically over the course of 24 hours before delivering the results to the buyer.
8. Financing Commitment Contingency: Is the purchase of the property dependent on you obtaining a mortgage from your lender?
9. Appraisal Contingency: For your mortgage, your lender will hire a licensed appraiser to go out to the property and complete a report to determine what the property is worth which the your lender will use to determine what amount of money they can lend for the property. Should the appraisal come in lower than the purchase price, the appraisal contingency may open the door for negotiations with the seller.

These are the bigger parts of the offer. Of course there are many more sections and terms that can be used to strengthen your offer or define how the transaction will proceed between you and the seller. Each of the aforementioned sections of the offer also come with many moving parts and are never as straightforward as they are laid out in this blog. When working with a Realtor, always make sure that you ask them to walk through the offer with you and have them advise you on strategies that will address your needs and get you an accepted offer.