You found it! Your home, the one you have been waiting for. From the moment you step in the front door you’re wondering where to sign the paperwork.
Entering into the offer process can stir up mixed emotions. A swirling mix of elation, excitement, and a shot of anxiety are the usual ingredients. Here is your chance to read ahead and be prepared for that moment.
Take a second and relax. Your real estate agent has it under control! Offer deadlines are posted by the seller (seller’s agent) and allow for a fair shake at submitting the offer. Typically it is within a few business days of the listing going live.
Once you’ve expressed your interest in making an offer to your realtor, it’s time to sit down and hash out the terms. If your purchase offer stands it will become a binding legal contract. Here are some basic categories of a purchase contract:
Address/Legal Description of the Property—this is very important to get right for title and lending purposes.
Offered Sale Price—what are you willing to pay? In a competitive environment many agents will recommend “highest and best” which is just like it sounds. Put your best foot forward upfront to eliminate extra time spent bartering back and forth with the Sellers (it will help you stand out from the crowd)—make sure to consult your loan officer during the pre-approval process to determine your buying power. It pays to be prepared!
Terms—is it all cash? Will you have a mortgage? How much are you putting down?
Closing Date—this is the deadline date both parties will agree to close on or before. The typical time frame is 30 days from acceptance.
Earnest Money Deposit—to show good faith, the offer will state how much money in earnest the buyer is willing to deposit.
Property Tax Payments, Rents, Fuel and Utilities Etc.—the offer will define how these are to be paid between buyer and seller at closing. Your realtor will have expert advice on how best to write these in.
Contingencies—these are commonly found in most offers to purchase. Financing and home inspections are the most common. Buyers need to show that they have been pre-approved by a lender within a certain time frame. For the buyer’s protection, they are allowed time for a home inspection and the contract is subject to the inspection report clearing to the satisfaction of the buyer.
Price Negotiation—a written purchase offer is the negotiating vehicle. In this, the Sellers can counter-offer with a change in price or terms. Once fully accepted, it becomes a legally binding contract.
As with any legally binding contract there are more details than shown in this article and every buyer should consult their personal real estate agent or attorney for advice before submitting a written offer to purchase. Hiring a professional to handle perhaps the biggest purchase of your lifetime is worth every penny!