Buying a Home

Making an Offer ... Fifth Step.

Once you’vefound the right propertyyou’ll need to make an offer. Buyers frequently ask “is there a rule of thumb” when it comes to making an offer. Whilst it certainly would make negotiating easy, the truth is, there isn’t. While it may be true that anything is negotiable, it may not be in your best interest to start too low. Often sellers “stand their ground” with low offers and don’t move at all. Yet the same owner on the next negotiation can be quite flexible. The reason is that the next buyers offer started somewhere in the realm of an eventual “fair price”. It must be remembered that whilst a buyer’s biggest fear is paying too much the seller’s biggest fear is accepting too little.

Once you have determined what your initial offer will be, it is usual practice toput it in writing. You will be asked to sign a standard Real Estate Sale Contract. Sometimes you may be asked to sign an “offer to purchase” instead. Usually this is done for the sake of expediency. It in effect gets the “negotiation ball” rolling and proves to the seller you are serious buyer.

The Real Estate Sales Contract is a legally binding document that sets forth the terms and conditions of the purchase. The terms and conditions must be agreed to and signed by both the sellers and buyers. Contracts can be intimidating, especially if they are thrown at you without guidance. If you feel intimidated it is advisable to take the contract to your solicitor. If you haven’t arranged one then it is in your best interests to find one. Their prices, accessibility and quickness of service can vary wildly. Use the one your friends highly recommend.

When you sign a contract the deposit you are prepared to offer will be important. You will often be asked for a cheque to cover the deposit at the time of signing the contract. The purpose of this money is to show “good faith” and that you intend to follow through with the terms of the sale contract. It represents your sincerity in attempting to purchase the property, makes the contract “legal” if accepted, and is totally refundable if the offer is not accepted or if some condition of the contract is not met.

The deposit is held in the Real Estate Agent's trust account for the benefit of both parties. If the contract doesn’t proceed the buyer getsthe money back. If the contract proceeds the money is applied to your down payment.

The next step is After the Offer is Accepted.