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Knowing how to make an offer on a house purchase does not have to be a stressful experience when you have the right team behind you every step of the way.
Who are the Main Players?
You, your realtor and your licensed mortgage advisor.
What to Expect When Making an Offer on a Home
As soon as you have found the right home and decide to move forward, your realtor will step up quickly to give you professional advice on what you should consider as your offer. Once you’re happy with making an offer on a house, you’ll sign the offer and your agent will deliver it to the seller for review.
The Contract to Purchase Sets Out:
- Your legal name and the seller’s legal name (Ask for proper ID when with your agent)
- The legal civic address of the property being purchased
- The amount you are offering to pay for the property
- The down payment amount provided with the offer
- The closing date
- Any items included in the sale (such as lighting, appliances, yard equipment, or any other item not legally considered to be part of the structure)
- Any specific conditions of the offer (example: Must pass a home inspection)
- How long the offer is valid for
Price Isn’t the Only Factor
When making an offer on a house the closing dates can affect the sale because some sellers may have to relocate quickly and others may want to leave in the summer months rather than mid-winter, conditions or contingencies can all influence whether your offer is accepted, especially if you put too many, be careful if the seller does not want to accept a home inspection. It usually indicates that they are hiding a serious problem with the home that they do not want you to find out.
Subject to Appraisal
The home must pass a professional appraiser inspection in order for you to purchase it. The appraisal is how the lender assesses the true value of the house in order to determine how much they are willing to lend you. The majority of the time the appraisal will come in at the sales contract price or higher so you can move forward. In the event it comes in short you have the option to negotiate with the seller to drop the sales price or even get out of the contract entirely.
You are about to make the largest single purchase in your lifetime, having a professional home inspection for $300 – $500 is an investment in protecting your interests prior to committing to the offer to purchase. Hidden defects in a home can cost thousands to repair and there are very limited home guarantees on home purchases if any.
Your real estate attorney will review the sales contract to identify any potential issues and suggest adjustments if necessary. Keep in mind the sales contract will likely evolve over time as milestones are met and other details change.