The truth is buying a house is a lot like marriage. It is part labor of love, part tedious legal jargon, and everything kicks off with a proposal — though real estate purchase proposals are significantly less flashy than marriage proposals! While you can certainly attempt to do it all yourself, having a realtor with you can make everything far less overwhelming and more stress-free. A good realtor would be privy to updated information and would be well practiced in speedily doing up the standard forms. After all, it is in everyone’s interest for the process to go as smoothly and quickly as possible. Nonetheless, even with a realtor, it does not hurt to have some insight into the process of buying the house and how to properly make an offer on a house yourself!
What Should Your Offer Include?
As with any binding legal contract, your purchase offer has a long list of requirements in order to turn it into a purchase agreement (if accepted). This will be covered by your realtor. Here is a list of everything you need to take into account:
- The address and perhaps even a legal descriptor of the estate
- Transaction price
- Transaction terms such as payment type
- Seller’s promise
- Scheduled closing date of the sale
- How much are you paying in earnest money deposit and how it will be paid, as well as how the deposit will be returned to you in the event the deal falls through
- How real estate taxes, utilities and water bills, and fuel will be prorated between you and the seller
- Who will be paying for title insurance, estate inspections, etc.
- Type of deed
- Other requirements of the state, along with disclosures and specifications of the estate
- Contingencies
- When the offer will expire
What is Earnest Money?
Earnest money refers to the deposit you put down to secure your offer of the property. Written agreements may not be enough for some sellers. As such, purchase offers are typically accompanied by earnest money in order to show good faith. These deposits are usually refundable if the deal falls through.
What Are Contingencies?
As the name suggests, contingencies are terms upon which the validity of your offer is contingent or subjected to. There are numerous types of contingencies, but the two most common types are:
- Home inspection: Such offers are valid only if the property receives a satisfactory outcome from a home inspector. There is typically a stipulated timeframe included and the inspection conditions should be explicated in the agreement.
- Financing: Such offers are contingent on the buyer being able to receive specific financing from certain lending institutions. If you cannot secure such a loan, the offer is no longer valid.
Can You Negotiate The Price?
Yes, you may negotiate the price of the property, particularly if you are in a strong bargaining position. This may include requesting lowered prices based on the results of a home inspection, or if you are paying entirely with cash. You can request your real estate representative to negotiate on your behalf.
