So, you’ve found the house of your dreams. Fantastic! But, what’s next? It’s time to write an offer. An offer is more than just a “fill in the blank” contract form. It’s a flexible document that should be crafted to suit the circumstances of the sale. Below are some things you will need to think about before you sit down to write your offer:
- How much do you want to offer for the house
- Your down payment/loan details
- How much earnest money deposit you want to offer
- Your preferred settlement date
- The settlement company
- Do you want to write the offer with any contingencies? If so, which ones?
- Are there other special terms/conditions that you want to include in your offer?
- Does the seller require any special terms or conditions?
No two offers are alike because each is crafted to the circumstances of the particular buyer and property. When you are ready to write an offer, we will sit down together and review it carefully so you understand what the documents say. We will discuss each decision you need to make so you fully understand every term of your offer. Once ratified by the seller, your offer becomes a legally binding contract and it is important that you understand it before you sign it.
After you write an offer, we will send it to the seller’s agent who will present it to the seller. When a seller receives an offer, the seller can react in one of three ways:
- accept your offer;
- reject your offer; or
- make a counteroffer.
In a counteroffer, the seller may change one small term or may make several significant changes. If a seller makes a counteroffer, you (the buyer) then have three options: accept, reject or counteroffer. Negotiations will continue between a buyer and seller until an agreement is reached or the parties conclude they cannot come to an agreement. This process can happen quickly (over a matter of hours) or can be stretched out over days.
Sometimes parties will engage in verbal negotiations to keep negotations moving at a brisk pace. This is not necessarily a bad practice. However, a contract for the sale of property must be in writing to be binding and enforceable. Any verbal agreement must be written down and signed off by all parties to be ratified.
When agreement is reached between the buyer and seller and all of the terms in the contract have been agreed to in writing, the contract is “ratified.” Once a contract is ratified, the buyer and seller begin to work through any contingencies in the contract. At this time, the contract is sent to the buyer’s lender and the settlement company so each can begin to work towards settlement.