Making an offer on a Home
Beyond obtaining a pre-approval letter, making an offer on a home is the first formal step to ownership. It is an offer written and signed by both you and your real estate agent and is created based on your wants and needs, taking into account what conditions you think the seller will accept. It is quite important that the property offer is written with consideration given to your agent’s expertise in the local and overall real estate market. The offer is basically a blueprint outlining terms and conditions for the sale and purchase of the home. Its acceptance – either as-is or in its negotiated form – makes it the home purchase agreement.
It will contain items such as:
- Legal description and address of the property
- Price proposal
- Financial terms
- Seller’s promise to provide clear title (ownership)
- Proposed closing date
- Deposit. Good faith earnest money you may pay by check or cash, showing that you are serious about the purchase of the home. There also may be instructions regarding return of the money in case the transaction does not carry through to completion.
- A formula or proration method to be used for the division of expenses between you and the seller. The expenses included might be items such as rent, homeowners dues, utility bills and real estate taxes.
- Specifications regarding payment of expenses such as title insurance, lot survey and inspections.
- Type of deed
- Disclosures of conditions such as environmental and/or seismic hazards and other locally-specific clauses
- Provision for final walk-through inspection of the property
- Any contingencies