When first-time home buyers begin the house hunting process, they don’t realize how many steps are involved. You have to secure a loan, find a property you love, and negotiate the purchase. It can feel like the process will never end. If you’ve made it to the offer stage, the finish line is finally within reach. Hooray!
With your agent’s help, you can make a bid on your dream home, and hopefully, seal the deal. In order to improve your chances of getting the house, your offer should be as strong as possible. Here are some things to consider when drawing up your contract.
Understanding What an Offer Contains
Unless you are acting as your own real estate agent, you won’t be the one doing the paperwork. Still, it’s important for buyers to understand the terms and contingencies that a typical offer contains.
In addition to the basics — like the address of the home and all of your personal details — the agreement will include the sale price, a target closing date, the amount of earnest money you will be required to deposit, and any other contingencies that you are asking for. Your offer will also give a time frame during which the sellers need to respond.
Choosing A Price
The price of the home is what concerns most people, in regards to the offer. Home buyers often have trouble deciding how much money to offer on a home, which is why it’s very important to work with a real estate agent you trust.
Remember that the housing market determines how much a property is worth, so your agent will look at similar homes that have recently sold in the area in order to help you come up with a reasonable offer price.
You should go into the negotiating process expecting to receive at least one counteroffer from the seller. But this doesn’t mean that you should start off with a low ball offer to see how flexible the seller may be. This is especially true in the Columbia area where, lately, homes receive multiple offers. If you give a low ball offer, your offer probably won’t even be considered.
Terms And Contingencies
The price is the most influential factor when a seller decides to accept or reject an offer. However, there are other terms and contingencies that may impact negotiations. Almost all real estate professionals suggest that you insist upon a home inspection. If you find out that the property has problems that aren’t obvious to the naked eye, you have the ability to back out of the purchase.
You may also want to write contingencies based on your ability to secure financing or the sale of your current house. Something as seemingly arbitrary as your chosen closing date might make a seller more likely to accept your offer. They may have already bought a new property and are anxious to move out.
As a general rule, you should choose your offer terms carefully based on the specifics of the home you are considering. Make sure to find a balance between making your offer as appealing as possible and protecting yourself against any potential issues.
Sealing The Deal
The final step of the process is presenting your offer to the seller. Negotiations can often feel like a game of phone tag as your agent communicates with the listing agent, and then the listing agent communicates with the seller.
You have the right to back out of your offer for any reason up until it is accepted. If the seller comes back with a counteroffer, you also have the choice to either accept the agreement or write another counteroffer.
Once both parties agree on an offer, you will both be bound in a contract, and you won’t be able to change your mind without losing some or all of your earnest money. When you have finally sealed the deal, the home will officially be “under contract” as you await your chosen closing date.
Barring any unforeseen issues, a signed contract essentially means that you have purchased a house. At that point, you can congratulate yourself on finally reaching the end of a long process!
