When you’ve found a home that you’re interested in, it’s time to make an offer. As your agents, we will draw up a formal contract with your offering price and necessary terms and contingencies.
You will want to review this document carefully and make sure it states your terms exactly. If your offer is accepted by the seller, this contract will become a legally binding agreement.
In addition to an offer contract, you will need to provide earnest money as well as a letter from your lender indicating your qualification to purchase.
Earnest Money is typically between 1% to 5% of the property purchase price. You will not be at risk of losing your earnest money as long as you do not default on your contract. There are several protections that will be put in place within the contract to protect your earnest money from default. We will explain these to you when we work on the agreement together. The earnest money check will be deposited at either escrow or the listing brokerage’s trust account, and will be applied towards your purchase at closing.
As a buyer, you will be in a better negotiating position if:
- You have been pre-approved for a mortgage
- You are not selling a house at the same time
- You have not loaded your offer with time-consuming or frivolous contingencies
- You have an understanding of how much competition there is and have a strategy to be competitive
When you make an offer on a house, you should be prepared for the negotiations to go back and forth before both parties agree to the terms. You might also have to compete with other interested buyers. We will offer advice, based on our research, as to what amount would be reasonable to pay.
When an agreement is reached on all issues, and both you and the seller have signed the offer, you are both under a legally binding contract. This is called Mutual Acceptance, and at this point, your contract and earnest money will be sent over to the escrow company. Learn more about what escrow’s role is and what title insurance is in our section on Escrow & Title.