The Home Buying Process
Step 5 – Making an Offer
This is what it is all about. You have found the home you want to purchase and make your home for years to come.
The first thing we will do is review the MLS together to verify the items that are included or excluded from the listing, as well as any concessions the seller has already agreed to pay and any obvious improvements, such as carpet cleaning by local carpet cleaners. Then we will make a list of any items we would like the seller to leave with the property and any concessions you would like to ask the seller to pay. This is common for first-time home buyers, but in a competitive market, this may reduce the seller’s net to a point that they choose another buyer. So, when it is a seller’s market, the less you ask of the seller the better.
I will conduct a market analysis on the property to ensure that it is accurately priced. If it is overpriced, you may decide to offer a price based on my analysis, but remember, the seller may not be as accepting of the lower price. Based on our discussion, I will draft up the offer and we will meet to review the offer in detail. The contract is written in the favor of the buyer, so there are many times throughout the process where the buyer can back out of the transaction.
You will sign the offer electronically if it is convenient. In Colorado Springs, most listing agents prefer to receive the offer electronically. This makes it easy to present the offer to absentee sellers. You can retain the links to the documents in your email for future reference or printing.
We will also review all the disclosures for the property if they are available. Typically, these include the seller’s property disclosure, square footage disclosure, source of water disclosure, etc. Ideally, you will sign these electronically as well, but probably not until we are officially under contract.
In most cases, we will receive a counter. The counter can be for price, dates, inclusions, or any other concession. Usually, it is more than one condition that is countered. Your option is to accept, reject, or counter the counter. If we counter the counter, we will draft up another counter or offer. Typically, at this point, we reassess if the seller is going to be cooperative. With the buyer’s approval, I will often negotiate verbally with the listing agent, so we don’t have too many counters going back and forth. Once we have agreement, we might submit a new offer with the earnest money, which is typically 1% of the price of the home and, in most cases, can be a personal check.
If you reject the counter, or we cannot come to an agreement with the seller, then it is time to move on, either to property #2 or we start looking at other properties.
If on the other hand, you and the seller come to an agreement, then everyone signs the offer/counter, which together becomes the contract, and your earnest money is submitted to the listing agent or the closing company. The date of the offer is the official date we are under contract.
Visit the next step in the Home Buying Process:
Step 6 – Contract Deadlines