Like me, you've probably heard from friends and family that buying a home is one of the most stressful (and exciting) things they've ever done. I'd wager that they're really just talking about the offer and closing processes — or at least that's how I felt. Luckily, I had an awesome agent to educate and guide me through the stressful process. And lucky for you, I took notes! Below, you'll find an outline of the traditional offer process so you can know what to expect when it's your turn to make the deal!
Step 1: Determining the Price
At this point you will have already gotten you pre–approval letter, set your budget, and determined the best mortgage option, so you'll have a good idea of what you're going to spend. However, you will want to work with your agent to determine an offer price that is fair for the home you want. This price is based off key considerations:
- Recent sales prices of similar homes in the same neighborhood
- The condition of the house
- What you are willing to pay
Step 2: Submitting the Offer
Once you've determined your price, your agent will draw up the offer, or purchase agreement, to submit to the seller's real estate agent. The offer will include the purchase price and terms and conditions of the purchase, including:
- Target closing date
- Provisions for certain fees
- A deadline for them to accept or counter your offer, typically one to two days
- Any contingencies, such as an appraisal and a successful home inspection
If the seller accepts and signs your initial offer, you will have a binding contract.
Step 3: Negotiating the Offer
Oftentimes, the seller will counter the offer, typically asking for a higher purchase price or to adjust 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. In each instance that changes are made through a counteroffer, you or the seller have the option to accept, reject or counter it again.
*I should caveat that I relied most heavily on my agent during this portion of the process. Once I received a counter offer my agent and I discussed my max price and items I was willing to budge on (broken curtain, for example). He and I had an open discussion about how involved I wanted to be in the negotiation process and how often he would update me, so I knew what to expect.
Step 4: Finalizing the Offer
The contract is considered final when both parties sign the written offer.
Next up I'll cover the closing process, which is the last step before you get to move into your new home!
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