Making An Offer
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Simply Making An Offer (No Obligation)
Once you’ve found a home you want to buy, you, with the help of your Buyer Broker you’ll need to negotiate a price with the seller and agree to a purchase contract. This simply means telling the seller how much you’re willing to pay for the house, if you decide to buy it. Making the offer generally doesn’t obligate you to buy the house, especially if the inspection turns up physical problems with the house. Buyers may wonder why they’re making an offer on a house before they know what physical problems the house might have, which will be revealed during an inspection. The answer is that we will structure the contract in a way that will let the buyer either walk away if significant problems are found, or will require the seller to fix them. Unlike many major purchases which have a specific price tag, homes sell for whatever amount the buyer and seller negotiate. Your Buyer Broker and legal council can help you determine the best amount for your initial offer. When you make the offer, keep these things in mind:
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Put it in writing.
All negotiations should be handled in writing–not verbally, ensure that there is a clear understanding between the parties. Never negotiate verbally. When you sign a contract and put down earnest money, the seller will know that you are serious and this will open the door for more negotiation which might result in a lower price and more concessions.
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Be prepared to submit an earnest money deposit (also called a “good faith” deposit)
to show your commitment to the transaction. This deposit, the amount of which varies , will go into an escrow account until the transaction is complete. If the deal doesn’t go through then you can generally get your earnest money back if the contract is worded right. If you default on the contract (for example, by not having the house inspected in the timeframe specified in the contract, then you lose the earnest money.
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Have your pre-approval from your lender
to give you maximum leverage. Sellers prefer offers from buyers whose financing is secured. Remember that no two real estate transactions are exactly alike. Buyers and sellers bring different backgrounds, interests, and agendas to the negotiating table, and the purchase contract will reflect those differences.
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Finishing Up
If the seller accepts your offer they’ll sign the contract, and then you can proceed with having the house appraised and inspected. If they don’t agree then they’ll likely make a counter-offer, by preparing a new contract with different terms that they ask you to sign. The process repeats until you either have a contract signed by both parties, or the deal falls through because the two parties couldn’t agree.