Crafting the Perfect Offer Letter

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When you're ready to make an offer on a house in Cincinnati, using a standard MLS contract can streamline the process and ensure all necessary details are covered. Here’s a step-by-step guide to help you write the perfect offer.

If you're working with an agent here are terms we are likely to accept on the first try so there is no guesswork.

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Price and Terms

Earnest Money:  1% of the purchase price is acceptable to be deposited with Superior Title (our preferred title company).

Settlement Charges: $0.  Clean offers are best.  Sellers “net” out the purchase price and settlement charges directly impact your net offer amount.  Avoid them if possible.

Financing Contingency:  Do not submit an offer without a pre-approval from a local lender or proof of funds.  There are amazing credit unions and local mortgage brokers who can guide you through this process.  In our experience, online lenders are more difficult to deal with and often impose fees or lack programs you can find locally.  All sellers prefer conventional loans and FHA should be avoided if possible as it drives up certain costs for the buyer and seller.

Appraisal Contingency:  Keep the duration short and consider offering appraisal gap coverage.  Appraisal gap coverage allows you to fund an appraisal shortfall should one exist from the appraisal.  It is rare for appraisal errors to happen but sometimes appraisers use inferior or unlike comparative properties and appraise low.  Offering $5,000 to $10,000 of appraisal gap coverage gives a seller confidence they won’t have to worry about negotiating minor appraisal errors or issues and clearly defines lines.

Inclusions of the Sale: Write in what already exists appliance-wise in the home.  An example for Urban Modern - we do not provide refrigerators in our homes.  We believe those are very personal preference purchases.  Adding in additional appliances weakens your offer compared to other parties.

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Brokerage Compensation: Not having an agent strengthens your offer but doesn’t necessarily increase your likelihood of securing a deal.  The typical range we see for represented buyers is 2%, 2.5% or 3% of the purchase price of the home.  Have the conversation with your agent regarding expectations prior to writing any offers.  Is the agent willing to negotiate if the property is in multiple offers, or if they are selling your existing home and also helping you on the buy side?  Good communication in advance avoids uncomfortable conversations later.  Agents work on success.  Ask yourself how you would feel if someone asked you to work for less than what are industry norms.  It’s best to have clear expectations upfront.

Inspections:  We welcome inspections as they build trust and ensure nothing is missed in the process.  A seven-day Inspection Period and a three-day Consideration Period are plenty of time to validate the home condition and have discussions.  Buying “as-is” gives you an advantage but as a seller we prefer inspections to give you piece of mind.

Title Insurance:  The lender will require you to insure the loan.  Talk to your agent and title partner on your comfort level for your own policy.  Urban Modern does not add any mortgages or liens on our properties, but there are many unethical actors out there so make sure you are protected.

Home Warranty: If you want one buy it and fund it.  Asking any seller to fund a home warranty is a net reduction in purchase price and will be treated as such.

Closing: 30 days or less is ideal.  Anything longer will require extra consideration and puts you at a disadvantage.

Title Company:   We use Superior Title because they are fair and thorough.  We receive zero compensation from Superior - we recommend them because they are easy to work with and timely.

Price:   We market price our homes and work on a relatively low margin given how thorough we are with our reconstructions and use of licensed trade partners and permits.  Many of our homes include long tax abatements which will provide you with many years of tax savings.  It would be rare for us to get a full price offer with clean terms and and not accept it. We never accept low ball offers as we price our homes to sell.