You’re moving full speed ahead and preparing to make an offer on your dream home. This is an exciting time and you’re closing in on the end of your homebuying journey. During this time, you’ll work closely with your real estate agent to determine a fair price that’s in range of what you can comfortably afford.
Step 1: Determining the Price
At this point you will have your pre-approval letter, set your budget, and determined the best mortgage option, so you’ll have a good idea of what you’re going to spend. However, you will want to work with your agent to determine an offer price that is fair for the home you want. This price is based off key considerations:
– Recent sales prices of similar homes in the same neighborhood
– The condition of the house
– What you are willing to pay
Step 2: Submitting the Offer
Once you’ve determined your price, your agent will draw up the offer, or purchase agreement, to submit to the seller’s real estate agent. The offer will include the purchase price and terms and conditions of the purchase, including:
– Target closing date
– Provisions for certain fees
– A deadline for them to accept or counter your offer, typically one to two days
– Any contingencies, such as an appraisal and a successful home inspection
If the seller accepts and signs your initial offer, you will have a binding contract.
Step 3: Negotiating the Offer
Oftentimes, the seller will counter the offer, typically asking for a higher purchase price or to adjust the closing date. In these cases, the seller’s agent will submit a counteroffer to your agent, detailing the desired changes. At this time, you can either accept the offer or decide if you want to counter. In each instance that changes are made through a counteroffer, you or the seller have the option to accept, reject or counter it again. Your agent will play a large role during this part of the process, communicating all changes with the seller’s agent.
Step 4: Finalizing the Offer
The contract is considered final when both parties sign the written offer.
Your final destination is on the horizon and your next step is closing. It’s the last step before you get the keys to your new home!
*excerpts from Freddie Mac Blog / Homeownership via Economic Focus