You’ve found a house you’d love to call your own.  How do you go about making an offer?


The process varies a little bit, depending on whether you are dealing directly with the seller or working with an agent.  (Remember, never call the listing agent or allow the listing agent to write your offer.  If the seller is represented by a real estate agent, YOU SHOULD BE, TOO!)


If you are working with a real estate agent, the agent will have and will prepare all the required paperwork, including the offer and most needed addenda (if it is a backup offer, a short sale, or you’re using FHA or VA financing, etc.)


If you are dealing directly with the seller, you and s/he will need to locate forms.  You may be able to find your state’s standard real estate forms online, but be careful to confirm they are current (real estate forms change frequently.)  A better option is to call a local real estate attorney and s/he can provide you with the proper forms.


When making your offer, keep in mind there are more items to consider than just the price.  Other terms include:


* length of your inspection period (or diligence period, in some states)

* closing date

* type of financing

* when you’ll take possession of the property

* amount, if any, of seller paid closing costs

* whether or not the seller will provide a home warranty

* payment of confirmed and/or proposed assessments

* home owner association transfer fees

* personal property, such as furniture

* amount of earnest money deposit

* in some states, amount of diligence fee

* “must-do” repairs


Once the terms of your offer are decided, your agent (or you, if you’re not represented) will present the offer and proof of financing to the seller or the seller’s agent.


Most sellers will accept a “pre-qualification letter” from your lender as poof of financing.  This is a letter stating that the lender believes you qualify for a loan based on your credit score and the financial information you have provided.


It’s typical to get a response to your offer within a couple hours to a couple days.


Most often, sellers will respond with a counter offer, suggesting terms that are somewhere between what you proposed and what they would ideally like to receive.


Depending on the custom in your area, the counter offer may be made in writing or verbally.  In either case, be aware that, in most states, neither an offer nor a counter offer are legally binding unless they are in writing and signed by both sides.  Until both parties sign the final contract, either you or the seller may change your mind without any repercussions (other than the opposite side having sore feelings.)


The “countering of terms” can continue as long as each side is willing to keep negotiating.  Typically, one side or the other will present their “final” offer or counter-offer after just a couple rounds of going back and forth.


Once the parties come to an agreement and they both sign the final paperwork, the deal still may not be truly “final.”  In some states, there is an attorney review period – typically three days.  If the buyers’ attorney asks for revisions, there may be additional negotiation.


In most other states, the deal is sealed once all parties have signed.


The earnest money is delivered to the escrow agent.  In states with diligence periods, the diligence payment is given to the sellers or their agent.


Finally, a copy of the contract is sent to the buyers; sellers; their respective agents; and the buyers’ lender and attorney/escrow company.


Next steps: the buyers submit all their financial information, so the lender can move the loan process forward; and the buyers’ agent works with the buyers to set up the home inspections.  You’ll find more information about financing and inspections on this site.