Understanding Making an Offer
Although you will be guided by your Buyer’s Agent if you have one, it’s always good to understand the process.
Obviously, once you’ve reached the point where you are making an offer on a house you’re at the final stages of the home buying process.
Hopefully the seller can accept your offer or make a counter-offer that is acceptable to you and you will end up with the home of your dreams.
Contingencies are often placed into the offer in order to protect or make sure that if things don’t go as planned the buyer and/or the seller are protected. These contingencies can vary according to the type of home you’re purchasing, where you are purchasing, and what you and the seller want to happen.
An example of a contingency could be that the offer depends upon financing. This is often a common contingency to have written into an offer; obviously written in to protect the buyer from being legally bound to buy a home when they can’t get financed. This is easily something that is avoidable though when you get pre-approval for a mortgage. Either way, most offers keep the contingency in place to cover themselves legally.
Other types of contingencies may include the sale being contingent upon the home passing an inspection or the sale of your home if you own a home and are trying to sell. These are all common types of contingencies that you can have added to the offer. Your agent will guide you as to what it is you should have the sale contingent upon.
There are certain forms that are used to write up an offer and these forms may vary from state to state. Your agent will obviously know and have the proper forms; this is yet another reason to work with a Buyer’s Agent as opposed to doing a “For Sale By Owner” type of sale/purchase. Depending upon the form and the state you are working in there are various parts of the Offer that will be on the form. These parts may include the following information, terms, and items:
- Deposit – often referred to as a “good faith deposit” that is made to assure that you are truly interested in purchasing the home. In most all cases if you pull out of the deal once the seller accepts your offer you lose your deposit.
- Offered Purchase Price – this is obviously the price you are offering the seller for their home.
- Closing Date & Occupancy Date – there has to be an agreed upon date for the closing and when you can take occupancy in most cases; however this is also dependent upon if you have contingencies that may actually make these dates determined by the contingencies. For example it may say 10 days after the home inspection is accepted or 30 days after the loan is approved, etc.
- Properties Included in Sale – this is actually an important part of the offer because you list the items that you want included in the sale of the home itself. Everything from appliances to carpeting to draperies, window dressings and even ceiling fans can be included. Again, your agent should guide you about what needs to be included and should be looking out for your best interests to assure that everything that needs to be listed is listed.
- Fees – this part discusses who is responsible for what fees that are going to be applied to the sale of the home. While you may just assume any fees are paid by the buyer this is not always true. You can often have the seller pay for points or other fees that may be involved.
While your agent puts together the offer you make and presents it to the Seller’s Agent, it’s always good to know what all is included in the offer. While the listing above is a very condensed version it gives you a general idea of what happens when you put in an offer. It’s always best to feel confident with your Buyer’s Agent and know that they have you covered when writing up your offer but understanding what’s happening may also help you to assure that nothing is overlooked.
If you have questions about the offer you have every right to question your agent and ask for an explanation. By the time you’re at this point of the buying process you’re probably anxious to get things completed and finally have the home buying process finished!