The Offer To Purchase
Eventually the day will arrive when you find just the right home at the right price. Remember that if you find the right home with the "wrong price," it is acceptable to make a reasonable offer. When houses are placed on the market, the selling agent completes a comparative market analysis (CMA) which is an estimation of the value of the property on today’s market. Ultimately the seller sets the asking price. Often when a house comes with an unusually high price tag, our advice is to make an offer. A seller may just be testing the waters and is willing to accept an offer in a price range that they know reflects the marketable price of the property. Never underestimate the buyer’s role in the selling of homes. Sellers don’t set the market prices of property. The buyers do. A property will only sell if a buyer is willing to pay the price.
Once a decision is made to purchase a home, the buyer’s agent prepares the Offer to Purchase. This document indicates the price you are willing to pay, how much money you are willing to put down with the offer – usually $500 to $1000 depending on the value of the property, how much of an earnest money deposit will be put down at the purchase and sale – usually 3% to 5% of the price, and the duration of the offer – usually 24 hours. If you do not receive an answer from the seller in the allotted time, the offer is considered void. The offer to purchase also indicates proposed dates for the P & S, the commitment letter from the bank for the mortgage, and closing. These dates are subject to change and are not etched in stone. Also on the offer to purchase are any contingencies, conditions, or items of personal property the buyer would like to have included in the offer.
This offer is then faxed to the seller’s agent. The buyer’s agent must deliver all offers to the seller. The agent cannot choose which offers to pass along. The sellers can do one of three things once the offer has been presented. They can accept the offer, reject the offer outright, or they can counteroffer. Those who counteroffer are generally giving the buyer some sense of where they all are in the negotiating process. This is where having a Realtor working in your best interest is so important. A qualified agent will be able to interpret the possible scenarios that may play out. They will negotiate with the sellers on your behalf. It is your agent’s job to help you purchase the home you want for the least amount of money or with contingencies that are in your favor. Negotiations, at this point, are generally completed over the phone.
Once an agreement is made, the process of purchasing a home actually begins.
This is a good time to clarify a very important point. Realtors are not appraisers, lawyers, accountants, lenders, bankers, or home inspectors. We encourage you to enlist the services of these professionals if the necessity arises or if you feel their assistance is in your best interest.
The Home Inspection »