You've found the home you've been searching for and now it's time to make your home purchase offer. What's your next step and who's going to guide you through the process?
When you're ready to make an offer, your real estate agent will take center stage, walking you though the following steps and communicating closely with the seller's agent and you. Here's how the offer process works:
Step 1: Determining Your Price
Your real estate agent will help you determine a price that's fair, based on their experience and important considerations, including:
- Recent sales prices of similar homes in the neighborhood
- The condition of the home
- What you can comfortably afford
Step 2: Submitting an Offer
Once you've determined your price, your agent will draw up an offer, or purchase agreement, to submit to the seller's real estate agent. This offer will include your agreed upon purchase price and terms and conditions of the purchase, including:
- Your target closing date
- Provisions for certain fees
- A deadline for the seller to accept or counter your offer, typically one to two days
When writing your offer, it's highly recommended that you make the home purchase contingent on the home inspection and appraisal.
Step 3: Negotiating the Offer
Oftentimes, the seller will counter your offer, typically asking for a higher purchase price or to move the closing date. In these cases, the seller's agent will submit a counteroffer to your agent, detailing their desired changes. At this time, you can either accept the offer or decide if you want to counter.
Each time changes are made through a counter offer, you or the seller have the option to accept, reject or counter it again.
Step 4: Finalizing the Offer
The contract is considered final when both parties agree to all terms and sign the written offer.
What's next? You'll need to provide your lender with a copy of the signed purchase agreement to finalize the loan application process. As always, lean on your team for any questions or concerns along the way – it's their job and they're there to help.
Follow this series to learn more about how things work in the mortgage industry, from the secondary mortgage market to closing on your loan.
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