Make an Offer

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Date
January 25, 2013
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The Offer to Purchase

Once you have found a home you want to make an offer on, you will work with your real estate agent to draft an offer. Your agent should give you advice based on a market analysis of recent sales of similar properties in the area. They will also take into account how competitive the current market is. Your agent can and should give you advice, but they cannot tell you what to offer. Ultimately it is up to you to offer what you feel comfortable with. Your agent cannot refuse to submit an offer you want to make.

When an offer to purchase is accepted it becomes a legally binding contract. For this reason, it is ideal to have your offer reviewed by a real estate attorney before submitting the offer. To realistically do this you will want to hire an attorney early on in the process. Your offer may need to be submitted soon after you see the home, so you need to know who you are working with at this point to make sure you can get your offer reviewed by an attorney. If your offer is counter-offered your real estate agent will work with you to negotiate further.

It is a good idea to familiarize yourself with the offer process and what is included in an offer so there are no surprises.

Contingencies

Your offer will include contingencies to protect you and your money in case something goes wrong in the purchase process. This comes in the form of the Offer to Purchase Contingency Addendum. In a competitive market you may be advised to waive some of the contingencies in order to make your offer more attractive to the seller. This can be a very bad idea, however, as these contingencies protect you from losing your deposit with the offer (typically $1,000) and later on, your down payment. A first-time homebuyer who is using a mortgage loan to purchase the home should never waive their mortgage contingency clause. The inspection clause should also never be waived (whether the property is 200 years old or brand new) as you never know the true condition of the house until you have an inspection. You will receive a Statement of Property Condition from the seller, but this should not serve as a replacement for a home inspection. If you are buying a condo, a Condominium Documents Addendum should be included with your offer, which ensures that that you get a copy of the condo docs from the seller and that you have the right to back out of the deal and get your money back if you are not satisfied with the rules and regulations or any other aspect of the condo association.