Making an Offer: Final Details On Your Home Search
4th December 2013
Once you’ve found the perfect home for you, it’s time to make an offer. Before you commit to anything, make sure this is really the house that you want. Contracts are binding, so once you’ve committed, it’s too late to change your mind. It’s important to know what houses in the area with comparable amenities have sold for. The better you know your market, the better prepared you’ll be for negotiating. A lot of times people will want to start the bidding by coming in with a “low ball” offer. If the sellers are highly motivated to sell, this may work, but more often, a better strategy is to make a realistic first offer. What you offer and what the seller will accept depends on the strength of the market and the circumstances of the seller. Your Realtor can help advise you on how much to offer by showing you what comparable homes have recently sold for.
In real estate, your offer has to be in writing, which means you’ll be using a real estate contract. Most likely you’ll be using a standardized contract that’s used by all the real estate professionals in the entire MLS area, which is almost all of the Chicago area. Because it is standardized, most of the legal details are spelled out in the body of the contract, and aren’t considered negotiable items. You’ve probably been told never to sign anything until it’s been looked at by an attorney. That’s usually good advice, but with a standardized real estate contract, one of the clauses gives you several days after signing during which your attorney can review the contract and make any legal changes. (Keep in mind, your attorney can modify legal issues, but can’t change the terms of the contract.) This allows you to move fast when you’re ready to buy, yet still make sure you are fully protected.
Most of the legal matters of the contract are already spelled out, but there are blank spaces where you fill in details specific to this home, and this offer. This will include the address of the property, your names and the seller’s names, as well as all the negotiable items.
Some of the items that are considered negotiable are:
The amount of earnest money: This is your “Good Faith deposit”. In order for the contract to be binding, you need to offer something of value upfront. The more money you put up, the more seriously the seller will view the offer, but you can make this whatever amount you choose. This money will be applied toward your costs at closing, and if the sale falls through for reasons outside of your control, you’ll most likely get it back.
Items to be included in the sale: You’re buying the real estate, but you want to be sure you are getting what you think you are. Items that are built in are considered fixtures and will stay with the house. But things like window treatments, playground equipment, refrigerators, and washers and driers are considered personal property. If they aren’t listed as part of the sale, they may not be included. If you choose, you can make these items, or anything else, part of your offer.
There are many other details to consider. Give me a call and I’ll be happy to talk you through all of them.