Purchasing a home is a complex process and you are best served by being represented by your own expert real estate agent. The agent will guide you through the process, helping you complete all necessary documents and handling the purchase negotiations and related offer and counteroffer documents.
You should have been pre-qualified by a reputable lender or mortgage broker before you began your search. This step will have helped you identify the price range you can afford.
When you find the right home, the agent will prepare a purchase agreement or offer. This document includes the address, location and legal description of the property, the purchase price you are willing to pay, any closing cost contribution you would like the seller to pay, the fact that you will be applying for the loan within a short period, usually 3 days. It also indicates the amount of the earnest money you have paid to your agent’s brokerage, which will be held in a trust account and your agent will submit a copy of the check with the offer. The contract also includes the fact that you are being represented by your own agent, the time and date of closing, the fact that you reserve the right to conduct an inspection and the time assigned to this step, and any other “contingencies,” you include in the purchase contract, such as the requirement that the property appraise for a value equal or greater than the purchase price or that the seller disclose or respond to any questions you may have.
Your agent will have you and your spouse (if applicable) sign the offer and the Seller’s Property Disclosures and fax it to the listing agent, along with the copy of the earnest money check. The contract will include a date and time by which the seller must respond and on which the offer expires.
If the seller agrees with your offer, he/she signs the contract and creates a Binding Agreement. At this time, all the terms of the contract have been accepted and the real estate agents on both sides move the process forward toward closing. If the seller does not agree with your terms, the listing agent will create a counteroffer, presenting the seller’s changes to the terms. This may include a higher purchase price than the one you offered, no contribution to closing costs or a different closing date, etc.
Typically, the buyer and seller may exchange several counteroffers before coming to the final agreement. Buyer and seller must remember that every counteroffer terminates the terms of the previous offer and empowers the other party to “walk” away from the negotiations.