Making An Offer

Negotiating your best deal with the seller requires some give and take and an understanding of the market

OK, you’ve been looking for homes and you found one that you love. What’s the next step?

First, let your agent know. He or she can help you devise a strategy for making an offer, and can prepare all the necessary paperwork. Second, don’t delay – be prepared at all times to make a decision quickly. May potential buyers have seen their dreams fade when another buyer makes an offer while they are still making a final decision, or have gone back to look at another less promising home to justify their choice.

You and your agent will sit down and work out the acceptable terms and standard contingencies (such as financing) for your offer, based on your negotiating strategy. For possible strategies, consult your agent. There are no “rules”; in some cases, for example, you may choose to offer full price because few similar properties are available and other buyers and looking for the same home. The possible strategies also depend on your individual circumstances and market status, such as: amount of cash and financing available, time frame for the move, selling of your present home, seller’s motivations, buyer competition, and seller (other homes for sale) competition.

What is the offer?

Your agent should be able to explain the fine details of your offer, the clauses in the contract, and how they affect you. If you need additional advice, an attorney should be consulted. (The following is not legal advice; rather, it outlines the basic process of a typical real estate purchase) Most importantly, you should know that your offer to purchase is a contract which, if accepted by the seller, binds you to comply with the terms of the offer.

The offer forms, and your deposit check, constitute your offer. The check is typically deposited immediately to a real estate escrow account, and serves as the initial “good faith” deposit on the purchase. A copy of the check and the contract documents will be presented to the seller (or his agent) by your agent. You may also be asked for a mortgage pre-approval letter.

If the seller accepts your offer as is, he signs it and his agent delivers it to your agent, and once it has been delivered back to you, you both have a binding contract.

The seller may, however, reject your offer, fail to respond to it, or make a counter-offer, This counter offer effectively cancels your offer, and replaces it with a new offer from the seller to you, which you then may reject or counter.

If the parties (you and the seller) can’t come to an agreement on all points, within the timeframe outlined in the offer, then the deposit may be returned.

Once the final offer or counter offer is accepted and such acceptance communicated in writing to all parties, the home is under contract. The contract then dictates the necessary steps to effecting the sale.