Making an offer on a house is a significant step in the homebuying process. It marks the point where you transition from searching for your dream home to taking concrete steps towards making it a reality. However, this process can be both exhilarating and a little nerve-wracking, as it involves signing a legally binding agreement with numerous details to consider. To help you navigate this crucial stage, your real estate agent will be there to guide you through the process, and you may also want to consult a real estate attorney for additional support.
Here are the key steps you’ll encounter when making an offer on a house:
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Make sure your financing and cash are all set: Before making an offer, ensure that your financing is in order. If you’re getting a mortgage, you’ll need a preapproval from a lender to determine how much you can borrow. Additionally, make sure you have the necessary cash for the down payment, earnest money deposit, and closing costs readily available in a checking or savings account.
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Determine how your buyer’s agent gets paid: With new rules in place, you’ll need to sign a contract with your real estate agent before making an offer. This contract will outline how your agent gets paid, whether through a traditional commission split or alternative payment methods.
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Set an offer price: Work with your real estate agent to determine a competitive offer price based on the market conditions, the condition of the house, and your budget. Consider factors like the list price, comparable sales, and the length of time the property has been on the market.
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Decide how much earnest money to offer: Earnest money is a deposit that shows your commitment to buying the home. Offering a higher earnest money amount can make your offer more attractive to the seller, especially in competitive markets.
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Choose the contingencies to include: Contingencies are clauses in the offer that allow you to walk away from the deal under certain circumstances, such as final loan approval, home inspection, and appraisal. Work with your agent to determine which contingencies are necessary for your protection.
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Write a purchase offer: Your agent will draft a purchase agreement that includes details like the price, earnest money, contingencies, and closing timeline. Make sure all the essential elements are included in the agreement before signing it.
- Walk away, negotiate, or move toward closing: After submitting your offer, the seller may accept, counter, or decline it. If the offer is accepted, you’ll move forward with the closing process. If there’s a counteroffer, you can negotiate or walk away if the terms are not favorable. And if the offer is refused, regroup with your agent and continue your house hunting journey.
By following these steps and working closely with your real estate agent and possibly a real estate attorney, you can navigate the offer-making process with confidence and increase your chances of securing your dream home.