Once a buyer has found a home they want to buy, it’s time to make a written offer. The buyer’s agent will take care of most of the work here and advise the buyers on certain terms, limits and approaches for the offer. According to Freddie Mac, there are a number of factors that go into a written offer that the home buyer should be aware of before they start the process of actually writing an offer.
The purchase price is the amount for which the buyer offers to buy the home,though it’s important to be aware that buying a home is a negotiation and often times the sellers will come back with a counter-offer. Before you start bidding on the property, talk to your agent about how strong you’d like your initial offer to be. This is especially important if multiple offers are expected.
Concessions are the requests the buyer asks of the seller. When you write an offer, you’ll want to be clear on which expenses – if any – you’d like the seller to pay, such as closing costs.
Along with concessions, you may want to ask the seller to include certain items with the home. These are what we call conveyances and can be anything from blinds to appliances to sound systems. You can ask the buyer to include anything in the sale – they might not agree but it doesn’t hurt to ask if they’ll throw in that 72″ TV!
IMPACT OF A HOME INSPECTION
Depending on the quality of the seller’s inspection reports, you might want to add a home inspection contingency as part of your written offer in order to protect your interests. If, for instance, the home inspection reveals a problem with the water heater or roof, you can ask the seller to pay for the repairs or ask them to lower the purchase price to offset the cost of the repairs you’ll make once you move in.
When you submit an offer, you also pay a deposit to show the seller you’re serious about buying their home. This is known as an Earnest Money Deposit and is held in a third-party account and applied to your down payment at close of escrow. If the sale falls through for some reason, the money might be returned to you, depending on the reason the transaction fell through.
Acceptance period is the amount of time the home seller has to respond to the buyer’s offer before it is revoked. If the seller accepts the offer after the acceptance period has lapsed, the offer may no longer be legally binding.