When you submit an offer on SnapDoor, you must specify all required price and non-price terms of your offer. They can be broken down into three different groupings: (1) Financial Terms; (2) Settlement Date; and (3) Non-Price Terms/Contingencies.
1. Financial Terms
A. Offer Price: You can specify your offer price in one of four different ways.
- Range Pricing with a minimum and a maximum. The minimum must be greater than or equal to the Starting Price. The maximum is the highest price that you are willing to escalate up to. In traditional real estate transactions, this is referred to as the "Escalation Maximum". The maximum is reached only if there is a competing offer that triggers your escalation.
- Upper Limit Pricing with only a maximum specified. This amount must be greater than or equal to the Starting Price and specifies the most you're willing to pay for the property. The maximum is reached only if there is a competing offer that triggers your escalation. Operates similarly to the Range pricing.
- Market Pricing that allows you to enter a bid that is higher than the current top offer. This is a one-time offer without any escalation. The market price is the bid that is next bid that is higher than the current highest bid (both price and terms. If you had previously submitted an offer with a escalation maximum, the escalation of the previous offer will be capped at the market price.
- Exact Pricing lets you specify an exact price without any maximum. You specify the exact amount of your offer. However, any exact price must be an improvement over the current highest offer (in both price and terms). If you had previously submitted an offer with a escalation maximum, that offer will be capped at the market price that you submit as part of your offer.
B. Down Payment: The higher your down payment, the stronger your offer (up to 20%).
C. Earnest Money Deposit: The higher your Earnest Money Deposit, the stronger your offer. This is the money that you deposit with the escrow agent (typically the Settlement Company).
D. Seller Subsidy: This is the amount that buyers may ask of the seller to cover some or all of the closing costs. This is discouraged as it will negatively affect your ability to be a successful bidder.
E. Financing Type: Different types of financing involves varying risks. This is taken into account in scoring and ranking your offer. Cash is always king. Conventional financing comes next. All forms of financing are accepted. You must provide proof of financing prior to being able to submit an offer on SnapDoor.
2. Settlement Date: As a general rule, most sellers prefer to close as quickly as possible. If there is a preferred date for Settlement, this will be made known to you.
3. Non-Financial Terms (Contingencies): These are the various contingencies that you are attaching to the offer. These include the various inspection contingencies, the financing contingency, and the appraisal contingencies. Most contingencies are to specified as waived or not waived. If not waived, you need to specify the number of days after signing the contract (date of ratification) the contingency will be valid. For example, if you specify seven (7) days for a home inspection, you are specifying that the contract will be valid for seven (7) days after ratification. Your offer will be stronger when you waive contingencies. Buyers should consider and then manage the risks associated with waiving contingencies.