If you are new to the home buying process, you will probably experience a little culture shock when it comes to the various intricacies of different real estate markets. While your agent is there to help you complete the process successfully, you should be aware of the market-specific expectations for you as a buyer. When you find the home of your dreams, you want to make sure you know what it takes to make a serious home offer.
Different Names for the Same Thing
Depending on where you are looking to buy and the local real estate legal requirements, your serious home offer can go by a few different names. To name a few be prepared for: purchase agreement, offer to purchase and contract, deposit receipt, earnest money agreement.
How a Home Offer is Made
Some states only allow attorneys to prepare real estate contracts that will legally constitute as your offer; other states permit real estate agents to fill out pre-printed, state regulated forms. Your agent will have the answers when it comes with what you need to make your offer, however due to the significance and detail of the transaction, you may want to consider hiring an attorney to walk through the contract with you before you sign it.
The depth and detail required within a contract for a home offer will vary based on the complexity of the deal, but there are a few basic terms every offer will include. First of all, your contract should always be dated with an expiration date and time in which your offer will expire; typically, this is a few days at most. Included will be the actual amount of your home offer and its terms – how you will finance the purchase; when you want to close; the terms of any contingent items, like the completion of the home inspection and how the outcome will be handled. Anything that is a contingency of your offer must be satisfied in order for the sale to be made.
How Your Home Offer is Presented
Most often your agent will need you to put down some sort of deposit for the seller in order for your offer to be presented. While this is not legally required in every state, most sellers will not take an offer seriously without some sort of consideration.
How Your Home Offer is Accepted, Rejected or Revised
When your offer is presented, the sellers may do one of three things: accept it, reject it or revise it. If they agree to all the written terms within the contract, they will sign the document and return it to you within your agreed upon timeframe, upon which you will be legally bound by its terms. If the seller rejects the offer entirely, you can make a counter offer which makes any prior offers null and void. You must specify a new timeframe along with any other terms. The seller can reject any subsequent offers you make, however. Finally, a seller may modify some of the terms of the existing contract, sign it, then return it to you for your signature and approval – which you may absolutely reject as well.
As a buyer, your offer contract is your last line of protection against making the wrong deal. Make sure you familiarize yourself with all the basic components that comprise a home offer, as well as any added ones that may be specific to your local purchase area. Any contracts you sign with your agent will be completely separate terms than that on an offers to purchase a home, so be aware of all the financial ramifications if you complete a deal.