Making the Offer!

You have your pre-approval letter in hand, have done your home searching, viewed your favorites with your Realtor, and have made a decision on the house you are ready to make an offer on. 

How do you know what to offer?

Depending on the market you will want your Realtor to pull up comparable homes in the neighborhood or area that have sold in the last 6 months.  They will be able to provide you this information from the MLS system and the tax records.  This will help give you an idea on what comparable homes have been selling for and what is realistic.  You Realtor will be able to help you decide what to offer and help go over all of the terms of the Standard Offer to Purchase and Contract form.  There are many addendums available to go with the offer that your Realtor can recommend if they fit your situation.  This is where having an experienced Realtor who is a good negotiator is crucial.  They will be able to help negotiate the best terms for you and keep everything running smoothly.

One thing you will need to keep in mind is that you will need to present and Earnest Money Deposit with your offer.  The Earnest Money Deposit is generally written to the Listing Company and they will hold the money in their Trust Account until closing.  At closing the amount of your Earnest Money Deposit goes towards the purchase price of the home. Depending on the price of the home you are purchasing this can range from as little as $250 to $10,000 and up.  Most of the times for first time homebuyer’s it is in the $500 to $1,000 range.

Once you have looked at the research your Realtor has gathered for you and have completed the Offer to Purchase and Contract form, your Realtor will present the offer along with a copy of your earnest money check and pre-approval letter to the listing agent.  Many times the Seller will end up submitting a counter-offer back to you.  At that point you can either accept the seller’s counter-offer or choose to send them another counter-offer back.  This can go back and forth several times but an experienced Realtor will be able to get to an acceptable point for both parties without too many counter-offers.  For common Questions & Answers on Offers & Acceptance visit this link: Questions & Answers on Offers & Acceptance

Once an agreement is reached any changes from the original offer will need to be corrected and then signatures from both sides will be needed.  At this time the Listing Company will deposit your Earnest Money Check into their Trust Account.

More than likely your contract will read that you are able to do various inspections at the home.  The most typical ones are the following:

Home Inspection – The most common inspection you will perform is the Home Inspection.  If you do not already know of a Home Inspector you would like to hire your Realtor will be able to provide you with a recommendation.  The home inspector will inspect the home and let you know of any problems they recommend being fixed.  They will generally provide you with a report that includes descriptions and pictures of any problems.  For common Questions and Answers on Home Inspection click on this link: Questions and Answers on Home Inspections

Radon Test – A Radon Test is also recommended.  Radon is a colorless, odorless, tasteless, naturally occurring, radioactive noble gas that is formed from the decay of radium.  The majority of times Radon is a problem is in a home that is built with a basement or on a slab foundation.  If you are purchasing a home that has either of those you will probably want to get a radon test.  There are homes with crawl spaces as well that have high radon levels so just because you are purchasing a home that has a crawl space does not mean you may not have a radon problem.  Many times the home inspector you choose is also able to perform the radon test for you.  For more information on Radon visit this link: Radon Information from the EPA

Termite Inspection – A termite inspection is also recommended.  Many homeowners will keep a termite bond on their home with a Termite Company who guarantees to keep the home free of termites and will treat the home if any termites appear. The homeowner pays an annual fee that is typically 1/10 the price of having your home treated. The company will typically allow for the bond to be transferred for a small fee so that is something you will want to look into if the seller already has a termite bond in place. If the homeowners do not have a termite bond in place it is definitely recommended to have the property inspected.

Water/Septic Inspection – Depending on the type of water & sewer system the home you are purchasing has you may want to have them tested.  If you are on a county or city sewer and water system you more than likely do not need to worry.  If you have a private well and septic tank it may be a good idea to have a Water Test and also a Septic Inspection.  Your Home Inspector can probably perform the Water Test, but it is recommended to have a licensed septic installer inspect the septic system.  Your Realtor can recommend one to you.

After all of the inspections are completed your contract typically allows for you to request for the seller to repair any items that are not doing their intended function.  This sometimes will end up being another negotiation item that your Realtor will be able to help you with.  If you are purchasing a New Construction home it is generally not a problem to have all the items fixed that may come up in the inspections and you will also do what is called a punch list walk-through with the builder.  This is where you are able to get even cosmetic items like paint touch ups fixed.

This covers the basics of making an offer on a home and into the first few steps of working towards closing.  There are other items that your Realtor will help you complete between acceptance of your offer and closing, but for now if you have further questions about the process feel free to contact us and we will be happy to answer your questions!  You can email us at alice@aliceray.com or call Alice directly at 919-906-5794!

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