Home Buying Process

Step 4 – Making an Offer

Congratulations -- you've found a home and you want to make an offer.

To the unprepared homebuyer, this could be an unnerving experience. But since you've done your homework and completed Steps 1 through 3, you are ready! Your real estate team is in place and ready to support you through the negotiation process.

Check the Payment

Prior to bidding on the home, contact your lending partner.  He or she will provide you with payment options using current interest rates so you can quickly determine if this specific home falls within your budget.  If you then decide to place a bid, your Full Approval will be revised to match your initial offer.

With Full Approval in hand, your realtor will help you prepare a written proposal (offer) to present to the seller and the selling agent.

Here again is where selecting the right real estate professional comes into play. 

Remember, the home buying process is a business transaction.  A strong realtor will have strong negotiating skills that will help increase the likelihood that your offer will be accepted by the seller.

It’s important to note that it’s not always the highest bid that wins the property.  In many cases, it’s the “best qualified offer” and how well your realtor “sells” your offer to the seller and their agent.

During the Homeownership Now event, leading real estate professionals will share with you the techniques and strategies they use to help their clients achieve greater success.

Specifics on the Offer

The purchase offer, once accepted by both parties, will become a binding sales contract known as the purchase agreement. For this reason, your offer must include all the important details necessary for the purchase of your home, such as;

  • Address and/or legal description of the property
  • Final Sale price
  • Terms of your mortgage commitment
  • Estimated date of closing
  • Amount of earnest money deposit
  • Attorney review process
  • Other Contingencies

What are Contingencies?

Contingencies are events that must occur in order for the offer to be binding. For example, the offer may be contingent upon a "satisfactory home inspection within two weeks of the conclusion of the Attorney Review process".

The Power of a Full-Approval

Remember, your Full Approval means you received an actual mortgage commitment before you began looking for a home. This approval gives you great negotiating power with the seller. The seller knows you have “cash in hand” to close the deal and they are assured the sale will go smoothly.

If you selected the right real estate partner they will understand the power of a Full Approval compared to a simple pre-approval and use this power to your advantage when “selling your offer” to the seller and the selling agent.  If they present the Full Approval to the seller like a pre-approval, what you accomplished during Step 2 will be lost.

The Seller's Counter Offer

The seller may accept your first offer. If so, your preliminary contract will go to your attorney for review.

If the seller refuses your offer, they may simply discontinue the bidding process or make you a counteroffer.

The counteroffer may change the purchase price, the closing date, a combination of both or some other prevision within your initial offer. You are free to accept the counteroffer, reject it, or make another counter offer.  It's all part of the negotiation process. 

The Attorney Review Process

The Attorney Review process is a period during which the attorneys (buyer and seller) review and further negotiate the details of the sales contract.  This is typically a 3 business day process.  However, if both sides fail to come to terms with the contract, the Attorney Review process could take weeks or even months.

Once the Attorney Review process has concluded, your contract is valid and binding.

During the Homeownership Now Event, legal professionals will share with you just how important the Attorney Review process can be to you as the home buyer….and what you should demand from your real estate attorney.

Step 5: Close