Once you have found the home you wish to purchase, you will need to determine what offer you are willing to make for the home.  It is important to remember that, in a seller’s market, there may be more competition for the home and some homes sell for more than the asking price.  Avoid bidding wars.  Only offer what you feel that the property is worth to you.  Remember, to be realistic.  You may not get seller concessions, in a seller’s market, and asking for too much could lose the deal for you.  Make offers you want the other party to sign.

I will contact the listing agent to see if there are other offers pending and present the written offer that you and we have prepared.  When the seller accepts an offer, signs it and returns it back to you, it becomes a legal contract.  When you write an offer you should be prepared to pay the earnest money and option fee.  The earnest money and option fee should be in your agent’s hands prior to submitting the offer.  Time is of the essence and this helps to eliminate delays.  Photo copies of both checks, along with the preapproval letter, or proof of funds, from the lender, are submitted along with the purchase offer.  A purchase offer submitted without proof of financial responsibility, will most likely not even be considered.  The option fee and earnest money can be paid with personal checks, but using money orders or cashier’s checks will avoid problems caused by bounced checks or delays in the checks clearing the bank.

An offers require that the agent has, in his possession, a check for the Earnest Money (usually $1000 or 1% of the offer price), an Option Check (usually $100) for the Option Period, and the Pre-Approval Letter or proof of funds (for cash purchases) from your lender, prior to submitting the purchase offer to the listing agent.  Personal checks can be used but money orders are like cash and protect against delays caused by bounced checks or bank errors.  Make sure that you get receipts for both checks.

After we present your offer to the listing agent, along with a copy of the Earnest Money Check and the Option Check, it will either be accepted, rejected, or the seller will make a counter-offer.  This is when we will negotiate terms of the contract if necessary.  We will discuss any counter offers, or problems areas in the contract, that the seller objects, to or wants to change.  Remember, a counter offer is a rejection of your offer, by the seller, and other offers can be accepted while working out the details of your purchase offer and getting the contract signed.

Once the contract is signed, I will see that the option fee gets to the listing agent and the earnest money check gets to the title company and that receipts are signed for both checks.  The Option Period begins, at this point and extends for the number of days that were agreed to in paragraph 23 of the contract.  You should arrange to have your real estate inspector inspect the property ASAP.  The inspection report will have a detailed description of all problems that the inspector finds.  This report can be used to negotiate repairs or compensation for items that are in need of repair.  If problems are discovered that cause you to change your mind about purchasing the property, you can cancel the contract, during the Option Period, and get your earnest money refunded.

The purchase agreement or contract constitutes your offer to buy and, once accepted by the seller, becomes a valid, legal contract binding on both parties.  It is important to understand what is written in the contract offer.  If there is anything that you don’t understand, or are concerned about, contact a real estate attorney for advice before signing.