Broker groups, such as the local MLS, working with legal counsel, have developed forms that are appropriate for realty transactions in specific communities. Such documents include numerous sale conditions, addenda and their wording should be carefully reviewed to assure that they reflect the terms you want to offer. Brokers can explain the general contracting process in your community as well as his or her role. While much attention is spent on offering prices, a proposal to buy includes both the price and terms. In some cases, terms can represent thousands of dollars in additional value for buyers -- or additional costs. Terms are extremely important and should be carefully reviewed.
You sometimes hear that the amount of your offer should be x percent below the seller's asking price or y percent less than you're really willing to pay. In practice, the offer depends on the basic laws of supply and demand: If many buyers are competing for a home, then sellers will likely get full-price offers and sometimes even more. If demand is weak, then offers below the asking price may be in order.
How do you make an offer?
In a typical situation, you will complete an offer that your broker or the seller’s broker will present to the owner. The owner, in turn, may accept the offer, reject it or make a counter-offer. Because counter-offers are common (any change in an offer can be considered a "counter-offer"), it's important for buyers to remain in close contact with their broker during the negotiation process so that any proposed changes can be quickly reviewed.
After you and the seller come to agreement on the terms of the transaction and it all signed around by both parties you are considered to be at “mutual acceptance”. You will likely need to make an “earnest money” deposit with either the company at which the closing will take place or with the real estate office handling your transaction. Earnest money is a deposit that protects the seller insures that you as the buyer will go through with the transaction and not leave it without cause. A cause to leave the transaction could be an adverse title report, an appraised value not up to purchase price, failure of financing approval or an inspection which you do not approve of.
How many inspections?
A number of inspections are common in residential realty transactions. They include structural inspections, checks for pests, surveys to determine boundaries, title reviews and appraisals to determine value for lenders. Structural inspections are particularly important. During these examinations, an inspector comes to the property to determine if there are material physical defects and whether expensive repairs and replacements are likely to be required in the next few years. Such inspections for a single family home often require three to four hours, and buyers should attend. This is an opportunity to examine the property's mechanics and structure, ask questions and learn far more about the property than is possible with an informal walk-through.