Making an Offer on a Home
Your offer to purchase
Working with your REALTOR®, you will prepare a purchase and sale agreement when you are prepared to make an offer on a house. He or she will then present that agreement to the home's seller.
The purchase and sale agreement includes many things, among them:
- The type of financing you are seeking
- The price you are offering to pay
- The amount of down payment
- The mortgage amount, including the maximum interest rate you're willing to pay
- The amount of earnest money
- A legal description of the property
- The closing date
- The occupancy date
- Personal property to be conveyed in the home
- Expiration date for your offer
Your purchase and sale agreement may also include contingencies, requiring a specific action to take place before the contract goes into effect. Your REALTOR® will help you determine if contingencies are in order in your specific case; some common contingencies include home repairs, environmental concerns, home inspection and appraisals.
Your REALTOR® will advise you of the seller's response after you've made an offer. The seller may accept your offer, reject it, or make a counteroffer.
If your offer is rejected, you will need to decide if you can, and wish to, make a higher offer. If the seller makes a counteroffer, you will need to make the same determination. Can you afford the new price? Will you need additional mortgage financing?
Other negotiations among the seller, yourself and your REALTOR® may also take place. Before making a counteroffer of your own, or agreeing to go ahead with the purchase, be sure to carefully examine every aspect of the counteroffer before you.
A home warranty may usually be purchased prior to closing, but paid for during the closing process. Occasionally warranties are provided by the seller or can be negotiated with the offer to purchase. Home warranties typically cover the mechanical components of your new home for a full year after purchase. The home warranty can help provide the comfort that you won't be facing bill expenses for heating, cooling, water heater replacement, etc. right after you move in. Ask your real estate professional about obtaining a home warranty and the full advantages.