After you find your dream home, you're ready for the next action
step in the negotiating process -- making an offer to purchase. No
standard, universally accepted real estate purchase contract is used
throughout the country. On the contrary, purchase contracts vary in
length and terms from state to state and, within a state, from one
locality to another. A good agent or lawyer will use the most
current version of the contract.
All good offers have three things in common:
Good offers are based on a realistic offering price. You
shouldn't pull the offering price out of thin air. Instead, base
your offering price on houses (comparable to the seller's house
in age, size, condition, and location) that have sold within the
past six months. Sellers' asking prices are often fantasy.
Actual sale prices of comparable houses are facts.
Good offers have realistic financing terms. Your
mortgage's interest rate, loan-origination fee, and time allowed
to obtain financing must be based upon current lending
conditions. Some offers get blown out of the water because a
buyer's loan terms are unrealistic.
If you've been prequalified or, better yet, preapproved for a
loan, you or your agent should stress that advantage when you
present your offer. This proves to the sellers that you're a
creditworthy buyer who's ready, willing, and financially able to
purchase their house.
Good offers don't ask the sellers for a blank check.At
the time that your offer is initially submitted, you won't know
the degree to which corrective work is needed unless property
defects are glaringly obvious. Under these circumstances, it's
smart to use property inspection clauses that enable you to
reopen negotiations regarding any necessary corrective work.
Remember that negotiation is an ongoing process. After the action of
having your offer accepted, your property inspectors gather
information. After they've determined what is actually required in
the way of corrective work, you and the sellers can renew your
negotiations armed with hard facts.
If the sellers agree with the price and terms contained in your
offer, they'll sign it. Their agent should give you a signed copy of
the offer immediately. When you actually receive a copy of the offer
signed by the sellers, you have what's called a ratified offer (that
is, a signed or accepted offer). This doesn't mean that you own the
house or that it has been sold. All you can say for now is that a
sale is pending.