Making an Offer

When you find a home you want to buy, your real estate broker can help you to make an offer to buy the home. Once an offer is accepted by a seller and signed, the offer is a binding legal document, so you want to be sure that you have everything in the offer that is important to you. Your realtor can remind you of many of these important considerations.

You specify in the offer exactly what you are willing to pay for the home. In a “seller’s market,” you may have to offer something very close to the asking price in order to get the home before someone else does. In a “buyer’s market,” it may be worthwhile to start out with a substantially lower offer. Sometimes the seller will accept, sometimes they counter with another amount, and the negotiations can go on until both parties agree on a final price. Note, however, that until the seller actually signs the final offer with you, the seller is free to consider other people’s offers that may come to the seller in the meantime. Your realtor will likely be able to tell you whether or not the local economic conditions present a seller’s market or not. If the seller refuses to reduce the price (perhaps because they need a certain amount to pay off the mortgage or for other reasons), you may be able to negotiate with them for you to pay the full price but for them pay some of the closing costs, make extra repairs to the house, or include items not normally included in a sale, such as a refrigerator or riding lawn mower or whatever.

You give the seller of the home an earnest money deposit to show that you are a serious buyer. If the seller accepts your offer and the sale goes through, this deposit goes toward your expenses in buying the home; if the seller accepts the offer but the sale does not go through (because you failed to qualify for a loan or you changed your mind or whatever) then the seller gets to keep the deposit. So be sure that you are ready to buy the house when you make the offer.

You may put into the offer any contingencies that have to be met or you are free to get out of the deal without losing your deposit. These could include such things as that the house has to pass all inspections, that you qualify for your loan, etc.

One contingency that you should put in is the option to have the house inspected, with a specified amount of time in which you will have this accomplished. Paying professional inspectors for checking the house’s structural integrity, freedom from termites, etc., is money very well spent. If the inspector finds any problems, you can either go back to the seller and adjust the price or ask the seller to fix the problems before the sale is completed, or you can even back out of the sale altogether, all without losing your deposit if you have specified this contingency in your official written offer to buy.

When both parties sign the final sales contract, a date is set in the future when the closing of the deal will be completed. In the meantime, with the help of your real estate agent, you begin to arrange financing and complete the inspections.

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