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When you have found a property you want to purchase, your agent will help you to formulate and submit an initial offer on your behalf.
An initial offer is usually made in writing as an offer to purchase and is prepared by your agent.
Once you have reached an agreement with the seller on the terms including purchase price, personal property to be included, projected closing date, conditions and contingencies (inspections, repairs, financing, etc.), you now have an “Accepted Offer.”
Consider your budget and start by making an offer that allows room to negotiate. The goal is to stay within that budget even after negotiations have been made, so keep it in mind when making that initial offer.
It's a rare thing for your initial offer not to receive a counter offer from the sellers. Something usually needs to be tweaked out and it's not always the price. (Subsequent “counter-offers” are often presented verbally.)
Other things to consider during the negotiations to keep the offer attractive to a seller, might include offering a larger down payment or earnest money deposit; being somewhat flexible with the closing date; having your loan approval letter ready from the start; and making sure the timeline on the inspections (and such), is a short one.
Consider any concessions you would like the seller to make. Do you want them to pay for closing costs?
Would you like them to leave the washer and dryer?
Would you like them to decrease the asking price?
These additions sweeten the deal for you and the seller often will comply if they can get the price they are looking for on the home.
It can feel like a waiting game after you submit your initial offer. An answer may come within minutes, hours, or a few business days.
You can force the seller's response within a time frame and written within the offer to purchase. A deadline for a response is typically 48 hours from receipt of the offer to purchase.
Be ready to negotiate and don’t let a seller not accepting your offer put you on the defensive.
You must realize it is not personal and that the homeowner is emotionally attached to the home, so settling for less than asking price is not always easy for sellers.
Depending on what the seller decides, you may have another choice to make. Either they will accept your first offer, counter offer back, or reject it completely.
Receiving a counter offer is the most common response unless you offered full asking price or very close to it.
If the seller does come back with a counter offer, you can do one of three things.
You're options are to accept their counter offer, come back with your own counter offer or reject their counteroffer and move on to another property.
Once all the counter-offers have concluded and both parties have come to a mutual agreement, final initials and signatures are placed on the offer making it a contract to purchase.
Before high fiving yourself, we need to get the contract over to the lender, order inspections, finalize all last minute details listed within the contract.
Your transaction has just begun, so pay attention to the details, especially the time lines that things must be completed by.
You may find yourself back in negotiation if the inspection turns up some major repairs, such as a new roof being needed.
If there is something major needed you have the right to renegotiate on the price or have the seller fix the issue, accept the repair yourself or simply walk away from the deal.
Remember, a price is determined between the buyer and the seller, so be flexible in negotiations and try to keep your emotions in check.
FYI: A typical transaction can take place comfortably within 60 days of acceptance of contract.