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Making an Offer

Congrats! You’ve found the place & you’re ready to put in an offer.

Your agent will draft the offer and send it electronically for you to sign via DocuSign. Our handy Guide to Multi-Board Contract helps define what the contract is saying in layman’s terms. Please use it as you go through the DocuSign PDF.

In order to submit your contract, your agent will need you to provide your contract terms, your pre-approval letter, & optionally a letter to seller.

Make sure to scroll to the bottom for Frequently Asked Questions!

Contract Terms

Purchase price: The seller will have an asking price on the listing. Your agent will look at comparable properties (aka comps) recently sold in the area. The comps help you to determine a fair market value for the home – it may be more, less, or equal to the asking price. Based on that, you’ll decide what you want to offer for the home with your initial offer. When you are submitting your initial offer, a general rule of thumb is to stick within the range that the comps support so that you do not run into any issues with the appraisal — more on that here.

Closing date: This is the day you get the keys! Typically, this is between 30-60 days out from the offer date, but can be longer or shorter if needed. You’ll want to discuss timetables with your lenders – if it’s longer, make sure your rate is able to be locked. If it’s shorter, make sure it’s a realistic timeline with your lender. Closings occur on weekdays during working hours.

Down payment: How much do you plan on putting down? It can be a percentage or dollar amount. 

Earnest money: This goes towards your down payment. It is not an additional fee. The first round (refundable during attorney review) is typically $1,000 and the second round (not refundable) is up to you. We see anywhere from 3-5%, or this can also be a dollar amount (i.e. $5,000). It is typically paid via check or wire, and it will be deposited into a non-interest-bearing account upon receipt. Typically, listing agents will try to get 5% in earnest money, but there is no harm in starting lower if it’s not a multiple offer situation.

Closing cost credit: This is if you want to build the closing costs into the purchase price. You increase the purchase price (i.e. by $5,000) and then request a closing cost credit from the seller ($5,000) so that it nets to the same number to the seller. The pro is that you have more cash in hand after closing as opposed to bringing this cash to the closing table; the con is you will pay interest on the increased price over the life of the loan. You will need to ask your lender for an estimate of closing costs if you want to go this route.

Home warranty: If the unit contains aging appliances and mechanicals, consider asking for a home warranty up front. This costs ~$550 and lasts for one year. It is paid for by the seller. Please read reviews, as home warranties can be hit or miss. Super is an alternative to a traditional home warranty. It is a subscription-based model, with a standard copay when you need any services.  

Personal property: A standard home purchase includes all mechanicals, appliances, and fixtures (anything attached to the wall). If there is anything additional you want to ask the sellers for, please let us know so we can denote it on the contract. (i.e. window draperies, shelving, tv mount, etc.)

Pre-Approval Letter

We will need this from your lender. The letter does not have to be tailored to the property, but if you are able to have your lender put the property address on the pre-approval, this greatly strengthens your offer! Sellers typically won’t accept an offer until they see a pre-approval letter with it.

Letter to Seller

This is an optional touch to make it more of a personal transaction. There are examples here. Tell the sellers what you love about their home! 

Frequently Asked Questions

Here are some common questions we receive about offers:

Can I make an offer sight-unseen?

Yes, though we would not recommend this, you CAN write an offer without viewing the home. This can happen in a competitive seller’s market. The seller may or may not be willing to entertain a sight-unseen offer, because they run the risk of you changing your mind.

Will the listing broker tell me if they have offers already?

A listing broker is not under any obligation to disclose whether they have offers or not. They need permission from their seller in order to disclose the existence of 1 or more offers. 

Also, a listing broker is not under any obligation to “let you know” if the sellers do get an offer, even if they tell you that they will. So, be sure to let your agent know if you have exceptional interest in a particular property and would like to move forward with an offer. We will do our best if we do get wind that a property you’re interested in gets an offer.

Lastly, a listing broker does not have to show “proof” of another offer unless you are using an escalation clause. 

What are my options in a multiple offer situation?

In a multiple offer situation, the most important factor is usually price. You’ll find a list of options for enhancing your offer here.

Why do I need to turn in two rounds of earnest money?

The purpose of earnest money is your way as a buyer to show good faith to the seller that you’re serious about the purchase and if they take their property off the market for you, you won’t back out over a “change of heart,” for example. The first round is fully refundable during your due diligence period, but with the second round being non-refundable, it gives you more skin in the game (i.e. more security for the seller). The second round of earnest money is due after your due diligence period and attorney review concludes. 

There is more information on earnest money here!

If I make a full-price offer with no contingencies, is the seller obligated to accept?

No. The seller can do whatever they would like. 

Once the seller accepts, am I guaranteed the home?

No. The buyer OR seller can cancel a contract at any time and for any reason during attorney review. Usually, the list agent won’t mark a property as “contingent” until receiving earnest money — so we recommend turning this in ASAP to dissuade other buyers from offering on the property. 

Nothing is guaranteed, even when you’re under contract with EM turned in. Sometimes, a seller might cancel the contract because a better offer sneaks in. This is very rare but happens occasionally. We want to make sure you’re aware of all of the possibilities. 

What is a back-up offer?

An official back-up offer is a contract with earnest money delivered that is contingent upon the first offer being cancelled. An unofficial back-up offer is a handshake agreement between brokers that should the first deal not work out, they will contact us to see if we’re still interested.

Am I legally bound to this contract?

Once it is fully signed by both parties, yes. However, you may cancel the contract at any time during attorney review to receive your initial earnest money deposit back, and there may be further contingencies included in your offer (financing, home sale, etc.) to protect you.

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