I work with a lot of first time home buyers, and the question of how to make an offer on a property comes up a lot, so I thought I’d write a post on the subject. One of the first things to remember is that an agreement means nothing in real estate unless it’s in writing. Therefore, an offer to purchase real estate is submitted in writing. One of the most important functions I serve as your agent is advising you on an offer, and writing and submitting the offer on your behalf.
Basically, an offer to purchase real estate is just a contract that hasn’t yet been completed. It hasn’t been completed because it hasn’t yet been signed by the other party, the seller of the property. The offer paperwork outlines the terms the buyer is offering for the sale of the property. Some of the most important terms that are included in this paperwork are the sales price, the type of loan you’re getting, your down payment amount, the closing period you are proposing, and the contract contingencies that you want.
A contract contingency simply means that the buyer’s obligation to purchase the property is contingent on the result of a specific process. For instance, I always advise my clients to get a home inspection of the property they are purchasing. A home inspection contingency in a real estate contract means that the buyer has the right to do a home inspection to determine the condition of the property. If the buyer is not satisfied with the condition of the property, they can walk away from the sale.
After I submit the offer on your behalf, a seller can accept the offer, reject the offer, or counter the offer. If the seller accepts the offer, the offer becomes a ratified contract, and the sale of the property moves forward. When a seller counters an offer, they are changing the terms in the original offer and submitting it back to the buyer as a new offer. The buyer can sign off on the changes or change the terms again and submit a new offer back to the seller. This process of countering continues until one party signs off on the most recent changes to the offer paperwork, and at that point there is a ratified contract.
When the time comes for you to start looking at properties, it’s important to work with an experienced buyer agent who will give you good advice every step of the way.