What purchase offer contingencies are common with negotiating a contract?
Aside from a proposed price, you can also include requests in your offer. Contingencies can include things like home repairs, or asking the seller to cover closing costs, appraisals, and even a home inspection. You can also suggest changes to the required earnest money, which is a deposit made to show good faith. Earnest money is typically held in an escrow account until closing, when it is applied to your down payment and closing costs.
If competition for the home is stiff, you could also use your purchase offer to entice the seller to choose you. To make your offer more competitive, you can offer the seller extra earnest money, a quick closing, or to take the home as-is. If you’ve been pre-approved for a mortgage,1 now’s the time to mention it—and you can also submit an offer letter to make your proposal a bit more personal.
What happens during the purchase offer process?
Once you’ve submitted your offer, it’s time to wait for a response. The seller has three options: accept, decline, or send back a counteroffer.
What happens if my purchase offer is accepted?
Congratulations, the seller accepted your offer! Now it’s time to sign a purchase contract and deposit the agreed-upon earnest money into an escrow account with the seller's realtor or attorney.
Once an offer is accepted, there’s usually a period to allow for a home inspection and attorney review (in states that use attorneys). The home inspection is the responsibility of the buyer, and the appraisal will be ordered by your lender . If the home fails the inspection and/or the attorneys can’t agree on any changes to the contract, the contract can be cancelled. Otherwise, any agreed-upon repairs should be completed, and your mortgage lender will proceed with the underwriting process to determine whether you qualify for a home loan. If approved, you’ll be on your way to closing on the home.
What if my purchase offer is declined?
Offers can be declined for many reasons. The seller may have accepted a better offer, or maybe someone just got there first. If that’s the case, you’ll need to keep looking. But, if they declined your offer for being too low or having too many contingencies, you can always work with your real estate agent to revise it and try again.
What if my purchase offer is countered?
A seller has the option to send back a counteroffer in the negotiation process. They may cross off some of your requests, offer a higher price than you originally proposed, or even make requests of their own.
If you’re satisfied with their counteroffer, you can accept. If not, you can work with your real estate agent to submit a counter to their counteroffer. The negotiation process can go back and forth as long as necessary. Just keep in mind that another buyer could submit a more enticing offer at any time.
Making an offer can be nerve-wracking, especially once you’ve found your dream home. Remember to consult with a real estate agent to properly analyze your offer, and be sure to include any contingencies at the offset. Then, cross your fingers and wait for that acceptance notice. Once you receive it, it’s time to celebrate; you’re one step closer to buying the home!
Want to make yourself more attractive to sellers? Become a PremierBuyer™2 to show sellers you’re serious about a prospective purchase and that you’ll be more likely to be able to follow through if accepted. It’s easy to apply—click below to get started!
