Making an offer

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Once you have identified the house you wish to purchase, your real estate agent will assist you in preparing an offer. Typically, offers consist of three key components: the proposed purchase price, the desired closing date, and the duration of validity for the offer. 

To determine an appropriate offering price, your agent will conduct a comparative market analysis, examining recently sold properties in the neighborhood that are similar to the one you are interested in. These comparable sales, commonly referred to as "comps," serve as a benchmark for assessing the fair market value of the property. Additionally, factors such as the length of time the house has been on the market and the presence of competing offers will also be taken into consideration.

In a sluggish housing market, it is common to present an offer below the seller's asking price. Conversely, in a highly competitive market where multiple buyers may be vying for the same property, it is customary to consider offering an amount that exceeds the listed price. Your real estate agent will leverage their expertise and knowledge of the current market conditions to guide you in formulating a compelling and strategic offer that aligns with your budget and goals. By carefully analyzing the available data and understanding the dynamics of the market, your agent will help you craft a competitive offer that maximizes your chances of securing the home you desire.

Offers and their additional components

• Seller Concessions: Seller concessions refer to costs that the seller agrees to pay on behalf of the buyer, reducing the amount of money the seller receives from the transaction. Common concessions include covering closing costs or providing cash back for repairs or renovations.

• Inclusions: Inclusions refer to items or fixtures that are included in the sale of the house. If you have specific requests for appliances, blinds, chandeliers, or any other items, it's important to clearly state them in the offer to ensure they are included in the final agreement.

• Contingencies: Contingencies are conditions that must be met for the sale to proceed. Common contingencies include a satisfactory home inspection, securing financing, and obtaining an appraisal that matches the agreed-upon purchase price.

Once the offer is drafted, your real estate agent will present it to the seller for consideration. It is customary to accompany the offer with earnest money, typically ranging from one to three percent of the purchase price. This earnest money, also known as a good faith deposit, is placed in an escrow account separate from the seller's funds until the transaction is successfully completed.

After the offer is made

Upon receiving the offer, the seller has the option to accept the offer as is, make a counteroffer with revised terms, or reject the offer outright.

• Accept: If the seller agrees to the terms of your offer, the house is considered sold and taken off the market. At this point, you and the seller enter into a legally binding contract. The contract can only be canceled if a contingency specified in the agreement is not met. If you choose to walk away from the purchase without a valid reason, you risk forfeiting your earnest money deposit.

• Counter: When the seller counters, it typically involves proposing changes to the purchase price, but they may also suggest alterations to the closing date, concessions, inclusions, or contingencies. You have the option to accept the counteroffer presented by the seller or respond with your own counterproposal, initiating a negotiation process between both parties.

• Reject: If the seller rejects your initial offer outright, you have the opportunity to submit a new offer with revised terms in the hopes of eliciting either an acceptance or a counteroffer from the seller. This allows you to continue the negotiation process and potentially reach an agreement that satisfies both parties involved.

The negotiation process allows both parties to communicate their preferences and reach mutually agreeable terms for the sale. Your real estate agent will guide you through this process, ensuring effective communication and working to achieve the best possible outcome for you as the buyer.