Preparing to place an offer on a property involves several steps.
The first step is to make sure you have a pre-approval letter that is current from a mortgage company. There is always the debate of using a local mortgage company or one from not of the area. That is your decision to make along with guidance from your agent. If you are making an offer using cash, it’s best to have a bank statement showing proof of funds. Make sure to redact the account numbers from the statement for security purposes if you plan on emailing the statement.
Second step is consulting with your agent regarding the offering price. The agent will provide you with a market analysis of similar homes that have sold in the area. The agent will also discuss offer options and tactics if there are more than one offer on the property. A couple of popular tactics are escalation clauses, rent back option and extended closing dates for sellers needing to find a place to live.
The agent will prepare a list of legal documents outlining the price, terms, conditions, inspections, important dates for you to review. An agent can provide an overview of the documents, however, is not permitted to go into legal definition of the documents. That is reserved to a licensed attorney to review with you if there are additional questions. A provision for an attorney review can be added to the contract or consult with an attorney prior to submitting the offer if time permits.
Once the document has been reviewed and any corrections have been made, the buyer can sign the offer. It is customary when making an offer on a property, an earnest money deposit is included as part of the offer. There isn’t a rule regarding contract deposits. It’s best to consult with you agent about a strategy with the deposit.
the agent will present the offer to the listing agent and summarize the contents of the offer. The agent also has the right to present the offer directly to the seller accompanied with the seller’s agent. This can be beneficial because your agent can present the benefits of the offer and why the buyer would be the best choice.
There is a timeline for acceptance on the offer. The seller has until the established date and time on the offer to respond. The seller can either accept the offer or reject it. If the seller signs the offer, it will constitute a binding agreement. If the seller does not sign the offer by the deadline or makes a counteroffer, the original offer becomes null and void.
It should be noted if the offer submitted involves multiple bids from other prospective buyers, the agent should ask if there will be a second round of offer or is this the final and best situation.