There are many factors that can affect your Agreement of Purchase and Sale (offer), however, the main one is financing. Most homebuyers do not have enough money with which to purchase a home, so they need to obtain a home loan. One of the major reasons that financing details are included in your offer is that most offers are contingent upon the buyer obtaining a mortgage, so the seller has the right to be informed of your financing plans in order to evaluate them.

There are two main reasons to disclose the amount of your down-payment this will allow the seller to evaluate your possibility of obtaining a home loan, plus it would be a lot easier to get approved by the loan company if you make a larger down-payment. The underwriting guidelines are less strict.

The other reason to include financing information is in order to protect your interests. If interest rates suddenly changes and rises quickly, you may be looking at a mortgage payment much higher than you anticipated. By putting a maximum acceptable interest rate in the offer, you are protecting yourself from such an occurrence.

Your offer should also contain information on whether you are obtaining a fixed rate or an adjustable rate mortgage. It should also state whether you are obtaining conventional financing or obtaining a VA or FHA loan. This is because government loans place additional financial and performance obligations on the seller.

The seller will probably want to see that you have some flexibility in the financing terms you are willing to accept. If interest rates are currently at eight percent and you indicate this is the highest rate you will accept, you would be able to cancel the contract without penalty if interest rates rose past that point. The seller would suffer because they have lost valuable marketing time and may have made their own plans based on successfully closing the transaction.

There may be times when, as part of your offer, you ask for certain incentives from the seller, one common request is asking the seller to provide funds to temporarily buy down your interest rate for the first year or two. Such incentives can be especially effective if a buyer is tight on money or pushing their qualifying ratios to the limit.

However, whenever you ask for incentives such as these, you will probably find the seller less willing to negotiate on price. After all, what you are really asking for is to have the seller give you some money to help you buy their house. The end result is that, for a little relief in the beginning, you are willing to pay a little more in the long run.

Another occasional request is to have the seller "carry back" a second mortgage to help facilitate your purchase of their home. This is when the seller of the property carries a second trust deed and note against the property. In certain cases when the seller does not need all the proceeds from their sale in order to purchase their next home, this is an option. The advantage to the buyer is that by combining your down payment and the second mortgage from the seller, you may be able to avoid paying mortgage insurance and save yourself some money.

If such a carry-back is part of your offer, you should include the terms you wish to pay on such a second mortgage. Keep in mind that your first trust deed lender needs to know this information so they can underwrite your loan, and they may have certain minimum requirements. The minimum term of the second mortgage can be five years. The minimum payment can be "interest only." Longer mortgage terms and payments that also include principle are also acceptable.