Understand the process of writing an Offer

 

WHEN YOU’VE FOUND THE HOUSE YOU WANT

As you and your agent decide how much you’d like to offer on a home, you’ll have to weigh some important factors. Here are some things to keep in mind that may affect the amount you want to offer:

 

  • The home’s asking price
  • Recent home sales in the area
  • Market conditions: Has the home sat on the market for a while?
  • How badly do you want the house?
  • The condition of the home 

 

Applied knowledge: Here’s where your Lender Pre-approval flexes its muscle. Sellers know that an offer from a buyer with Pre-approval from a Lender is solid. That’s an advantage over most shoppers who wait to get approved until after they find a home to purchase, since your upfront approval confirms that your financing will not fall through. Sellers also appreciate that buyers like you can close quickly because you’ve already jumpstarted your home loan process! Your real estate professional will prepare the documents that will make your offer official, and will present it to the seller, or to the agent who represents the seller. Usually, the seller will have a few days to make a decision.

 

 Here are a few definitions that will help explain this process:

 

  • Purchase agreement: The purchase agreement is a binding document that indicates the amount of your offer. (Your agent will supply this.) It may also include details like which appliances will stay with the house, and when you’d like to take possession.
  • Earnest money: Earnest money is a deposit to show that you’re committed to buying the home. Typically, the deposit is a small percentage of the asking price that’s comes back as a credit at closing. Your agent will hold the check/deposit (made out to Closing Attorney) until the offer has been accepted.
  • Due Diligence Money will also be collected, this check made out to The Sellers for taking their home off the market. During the Due Diligence Period, you will have a home inspection done, review documents etc...if you back out of a contract during this period, normally a 2 week period, you will lose this money. If you move forward this money will also come back as a credit at closing.
  • Counteroffer: The counteroffer is the seller’s response to your offer – made in part to continue negotiations toward a purchase agreement. 

 

When your agent presents the seller with your offer, sellers can:

  • Agree to your offer 
  • Decline your offer 
  • Make a counteroffer 

 

Sellers can counteroffer with their desired amount – typically within 24 to 48 hours. At this point you can either agree with their terms or make another counteroffer. This process continues until you come to an agreement that satisfies everyone.