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Homebuying: Making an Offer and Closing the Deal

Let's say you've done everything right when navigating through the home buying process - you scrimped and saved, improved your credit score to get the best mortgage rate, and secured pre-approval for your loan. Then, armed with research and data, you identified a great house in your favorite neighborhood.

Now, you're ready to buy. You only have a few hurdles remaining: making a smart offer, negotiating the terms of your contract, addressing contingencies and, finally, walking away with the keys in your hand after closing the deal.

Now that you're so close, it's more important than ever to minimize mistakes - and to bring your home purchase in for a happy landing.

Submitting an Offer

There's much more than just price to consider when making an offer on a home. This is a legal transaction, so it's vitally important to spell everything out explicitly, and to avoid any errors.

For example, if the seller has agreed to cover closing costs, this should be included in your offer. Your offer should include all of the terms and conditions of the sale, along with the price being offered.

Purchase offers also typically include the following information:

  • Closing date.
  • Financial terms of the sale.
  • A time limit.
  • A descrption or address of the property being sold.
  • A promise to deliver a clear title.
  • Terms for resloving pro-rate dbills or fees, such as utlitiy hook-ups.
  • Earnes money deposit considerations, including how the deposit will be returned if the ofer is declined.

Additionally, the issue of contingencies should be addressed in your offer. These are conditions which need to be met before the sale can proceed. Standard contingencies include the home passing inspection, or the buyer securing financing.

Everything's Negotiable

Other, less typical contingencies can also be negotiated between the two parties. For example, the sale might be contingent on another house being purchased. Should the buyer and seller agree to this, a timetable for that sale may also be negotiated.

Price, of course, is the primary point of negotiation. If the seller is motivated, a cash buyer (or even a buyer with pre-approval) may be in a strong position to negotiate a better price. Aside from using data from comparable home sales in the area, you should also weigh other factors when deciding on a price point. Is the housing market slow? Has the house been on the market long? Has the price been reduced? Does the seller have personal reasons for desiring a quick sale?

Dealing with Closing Costs

Closing costs are the fees associated with any real estate transaction. They can be incurred by the buyer or the seller - and who picks up the tab can be negotiated.

In slow markets, you might find most sellers are more than willing to shoulder the burden of covering costs. Now that the housing prices have risen across the country, however, it's no longer a sure thing.

Two more things to note: Sometimes, it's easier to get a seller to pick up closing costs than to make an equivalent drop in the listing price. Also, the assumption of closing costs can be used as leverage if a problem develops during the inspection process.

Crossing the Finish Line

The process of buying a home may be long (and occasionally a bit arduous), yet the payoff is immense. There are few moments more exciting than walking into a home you own for the first time!

By weighing factors such as these, your odds improve for getting the house you want at the price you desire.