Whether you use a real estate agent or do it yourself, making an offer to purchase a home is never as simple as it seems. If you watch any of those real estate reality shows that are so popular, it may seem like finding the right house is what it’s all about. And while that part is obviously crucial, it isn’t the only factor that needs to be considered.
What’s In An Offer?
Then we made an offer and they accepted it scenario is ideal, but it doesn’t often happen that way. Your offer to purchase is a legally binding document, so it’s wise to have your lawyer look it over, even if your agent has already done so. A lawyer may pick up on small legalities that can effect your offer that your agent may have overlooked.
Within your purchase are details such as the price you’d like to pay and any conditions you’d like attached to the purchase. These may include a home inspection, your financing being accepted, or your current home being sold. You may also want them to leave certain appliances or equipment beyond the standard fridge, stove, washer and dryer.
Once all these details are determined and the document is approved by the lawyer, you send it in and wait for a response.
A straightforward acceptance by the vendor is the ideal response. If they accept your price and any conditions, the house is yours and you can move onto the next stage in the process.
A lot of the time, the seller will make a counter-offer to you. The counter-offer might include a higher price than you offered, some different terms and conditions, or both. You can accept this and the deal is done, or sign the offer back with a higher price than your original but lower than the counter-offer.
This is where it is important to know exactly how much you can afford, because if you really like the home, your judgment can be easily clouded and you might end up agreeing to a price that doesn’t fit into your budget. Even if you have a mortgage pre-approval, the highest amount you’re approved for isn’t always logical financially. If the buyer and seller can’t agree on a deal at this point, the sale won’t go through and the deposit is returned.
Sometimes, there are multiple offers on a home, and the seller has the luxury of accepting the one that best meets his needs. This is another time when you have to be careful about taking your offer too far. Bidding wars are fun to watch on television, but in real life you may end up paying a lot more than you should.