Questions! I'm About to Make my First Offer

[Matthew Gundersen]

Good morning everyone,

I am getting ready to make my first offer on a property. I have been reading articles for a long while now and toying around with numbers on my Spreadsheet about potential properties. I have finally found one that I think fits the investment I am looking to make. However, I am still a little nervous (but excited!) about making my offer. I have a few questions that I am hoping can be explained to me..

I've been reading about putting contingencies in the offer. Like having the offer subject to a home inspection or loan qualification. Does this mean that the offer will need to be accepted contingent on these? Or are these things (like home inspection specifically) performed before the offer is accepted?

Also, my agent informed me that I will need a prequalification letter from my lender. No problem I can get that, but should I get it for the asking price of the property? The property needs some work so I am preparing to submit an offer quite lower than the asking price. In your experiences have you found having a letter for the asking price is better? Or should I get the letter lower to what I am preparing to ask?

My last question is about earnest money, I have to put down earnest money to show the seller I am "Interested" in the property? So I am wondering if there are any criteria anyone uses to determine how much money they normally put down? I don't want to lose this money if the offer is accepted and then a house inspection goes through and there are unforeseen major repairs needed on the house... is that what the property inspection contingency is for?

Any and all answers are so appreciated! Hoping to make my first deal before the end of the year! THANKS SO MUCH!!!