Once you have found the property you want, we will write a purchase agreement. While much of the agreement is standard, there are a few areas that we can negotiate:
- Price – What you offer on a property depends on a number of factors including its condition, length of time on the market, buyer activity, and the urgency of the seller. While some buyers want to make a low offer just to see if the seller accepts, this often isn’t a smart choice, because the seller may be insulted and decide not to negotiate at all.
- Closing Costs – The allocation of some closing costs are negotiable, such as who pays for termite reports and repairs, escrow fess, title insurance, home warranty, etc.
- Move-in Date – If you can be flexible on the possession date, the seller will be more apt to choose your offer over others.
- Additional Property – Often, the seller plans on leaving major appliances in the home; however, which items stay or go is often a matter of negotiation.
What Documents are in the Offer
The following documents will be included with an offer:
- Residential Purchase Agreement (CAR form RPA) – This is the contract that states the terms of your offer and is the most important document in your offer.
- Agency Disclosure (CAR form AD) – This is a requirement in California. This standard form clearly discloses who is representing whom in the transaction.
- Pre-approval Letter – This letter provide proof that you have a conditional commitment for an exact loan amount from your bank.
- Earnest Money Deposit – This is typically 1% to 3% of the purchase price and is credited towards your down payment. This can be a scan or digital photo of a personal check made out to “Escrow Holder”.
- Offer Letter – This optional letter describes who you are as a buyer in writing and with a photo or two. The reason you want to include this is that it humanizes the offer and will set you apart from offers without letters. For tips on how to write one, read this Realtor.com article.
Presenting the Offer
Typically, you will not be present at the offer presentation – we will present it to the listing agent and/or seller. The seller will then do one of the following:
- Accept the offer
- Reject the offer
- Counter the offer with changes
By far the most common is the counteroffer. In these cases, my determination and negotiating abilities become powerful in representing your best interests.
When a counteroffer is presented, you and I will work together to review each specific area of it, making sure that we move forward with your goals in mind and ensuring that we negotiate the best possible price and terms on your behalf.
Steps in the Home Buying Process
Step 3: Make an Offer