You found it.
It’s the right house, in the right area, and almost the right price. You can do it. You can buy this house.
Now what happens?
First, you will write an offer to purchase the home. Very likely, your realtor will write it for you on a form utilized in your state. In many states these are in contract form. Your offer to purchase will include the following:
1. The total amount you are offering for purchase
2. The amount of your down payment
3. The amount of your mortgage
4. The date you want to close, and the amount of time you think you will need to get a mortgage
5. Whether or not you will have a home inspection
6. Items you expect to be included with the home, if any, such as light fixtures and appliances
When an offer to purchase a home is written in contract form, it is not a contract until the other party accepts your offer and signs it. Once the offer is accepted and signed, both parties have a specified amount of time for “attorney review”, where an attorney can modify or disapprove the contract.
In some areas, the offer to purchase customarily includes “good faith money”. Usually a check for $1000 to $10000 is deposited in the real estate brokerage trust account, showing that you are so serious about this offer that you have already put money down. If the offer is not accepted, the broker must return the money to you within a specified time. If the offer is accepted, the broker must retain the money while the property is under contract, or turn it over to an attorney’s trust account if so instructed.
Once the offer is written, your real estate agent will present it for you to the seller. Your agent sold you on the house, now she has to sell you to the seller! Sometimes, offers are only presented to the seller’s agent, but when possible, it is in the buyer’s best interest for their agent to meet directly with the seller and their agent. That is the time when they can tell the seller what wonderful people you are, and answer any questions the seller may have. Usually, that is a time when you should be available by phone in case your agent has to get in touch with you.
Know what you can afford, and trust your agent. The agent’s job is not to “win” at aggravating back and forth nit picking negotiations – the agent’s job is to get the house for you. Follow your agent’s advice as to a reasonable offer, and stay within the guidelines of what you can reasonably afford. In a competitive market, too much dickering back and forth may lose you the house, and make another buyer look much better.
Sometimes sellers are completely unreasonable. If you and your agent believe this to be the case after presenting a reasonable and well qualified offer, keep looking. Sometimes, the seller who asks too much may find that the deal he has agreed to goes sour, or that no one will pay what he is asking. They just might come back to you! It doesn’t happen a lot, but it does happen.
Your agent can best advise you on market conditions and reasonable pricing. Focus on finding the right property at a price you can afford, keep your perspective in the negotiation, maintain honest communication with your agent, and you will soon be closing on that first home!