Making an Offer
Frequently Asked Questions
The time it takes for an offer to be accepted or responded to can vary depending on several factors, such as the offer’s expiration date, the seller's responsiveness and the local real estate market. In some cases, an offer may be accepted quickly, while in other cases, it may take several days or even weeks to receive a response.
Once your offer has been accepted, you are typically bound by the terms and conditions of the purchase agreement. However, some contingencies, such as financing or inspection contingencies, may allow you to back out of the offer without penalty. It is important to review the purchase agreement carefully and consult with your real estate agent if you have any questions.
A multiple-offer situation is when there is more than one offer on a property at the same time. Sometimes you will hear that sellers are “waiting to review offers” for several days to a week. This allows the seller to get full market exposure, while increasing the possibility of multiple offers.
Comparables or comps are recently sold properties that are similar in location, size and amenities to the home for sale. Reviewing and analyzing them can give you a clear idea of the fair market value for the home you are looking at.
An escalation clause declares that you will pay a stated amount for a property, but if there are higher offers, you will increase your offer by a set amount over the highest competing offer, up to a designated maximum price. For example, if a house is listed at $550,000, you might say you are willing to pay $550,000, but will beat any higher offer by $1,500, up to a maximum purchase price of $575,000.
A pre-inspection is a property inspection done at your expense before you make an offer. Some buyers choose to pre-inspect a home in a multiple-offer situation, as it allows them to waive their inspection contingency and make a stronger offer.
Your earnest money shows the strength of your commitment to the seller. It needs to be an amount you are comfortable with, that also satisfies the seller’s need for security. It is often expected to be 2% to 3% of the purchase price, but is negotiable. This is typically fully refundable until all of your contingencies are removed, and gets credited towards your down payment amount at the close of escrow. Talk with your agent about what amount makes sense in your situation.
A contingency is a provision included in a sales contract stating that certain events must occur or certain conditions must be met by a particular date or the contract is terminated and the earnest money is refunded to the buyer. In real estate the terms “subject to” or “conditioned on” are often interchangeable with “contingency;” i.e. “the offer is subject to inspection.”
A counteroffer is an alternate offer made by one party which changes the original or latest offer of the other party. All parties must agree to the changes in writing for the contract to become binding.
HAVE ANY QUESTIONS?
We’re happy to answer any concerns you might have.
