Buying your home: from the time the offer
to closing.
Sealing the deal on a home purchase can be a challenging multi-step process.
Find out what to expect as you move closer to buying a home.
Negotiating Tips
Once you've decided on a house that's in your price range you
have to decide whether to pay the seller's asking price or negotiate for a
better price. There are several things you should consider if you want
to negotiate a better price:
- The sales price on other comparable properties in the area.
- What neighborhood the home is in.
- The number of people making offers.
- Whether it's a buyer's market (houses are plentiful and the buyer
has the advantage) or a seller's market (houses are scarce and the seller
has the advantage).
- Why the sellers are selling.
- Have the owners already found and bought another home.
The Offer
When it's time to make an offer, the real estate broker representing the
seller will often produce a standard form listing the price and other details
of the purchase offer. This form should be read with great care, because
if accepted, it's a binding contract
.
The agreement for should include:
- Address and legal description of the property.
- Financing details.
- Desired closing date.
- What comes with the house and what's to be removed.
- Contingent clauses, which say you won't buy the house unless you're
satisfied with a home inspection, certain financing is available, or other
standards have been met.
The Counteroffer
After the first offer, you may receive a counteroffer from the seller.
Like your first offer, the counteroffer should be in writing. You
may trade counteroffers with the seller several times until both parties
reach an agreement or walk away from the deal. If you reach an agreement,
you sign the counteroffer and you have a deal (subject to the contingencies
included in your contract). Again, do not sign any paperwork until
you have consulted with your representatives.
Earnest Money
You'll probably be required to make an earnest money deposit that will
either be applied to your down payment or forfeited if you pull out of the
deal for reasons not allowed by your offer. The check should not be
made out to the seller; rather, it should go to the real estate company and
have trustee or fiduciary agent written after the name. Be sure the
check is not deposited until your offer has been accepted.
Inspection
The offer you make to the seller should include a clause that says the purchase
is contingent on the home passing inspection within a certain number of days
and that the inspection must be satisfactory to you. The clause should
also state that if the inspection is not satisfactory to you, you can withdraw
from the transaction and get your full deposit back, or the seller can make
the required repairs.
You should always hire a professional to inspect an existing home within
a few days after the offer is accepted. Buyers of new homes may require
a more rigorous inspection process. A new house may be inspected first
after the foundation is completed, then after the framing is installed, and
then at the final walk-through.
A home inspector should independently evaluate all the main systems and
equipment - electrical, plumbing, heating, air conditioning, hot water, and
major appliances. The cost for an existing home inspection will run
from $200 to $300 depending on the size, price and complexity of the home,
and also whether the home is new or existing.
Final Walk-through
Before closing on an existing property, you can have a final walk-through.
The purpose of a walk-through is to assure that the condition of the house
has not materially changed since the sale offer was accepted. You can see
if all repairs and changes required in the sale agreement have been completed;
if not, speak with your real estate broker or attorney.
New Home Final
Walk-through
The builder's representative will walk through the home with
you and check off items that need repair or completion ( a punch list). Keep
you own list, compare notes at the end of the walk-through, make sure all
the items are on the punch list and get a copy of the punch list for yourself.
Sometimes work for new homes can't be done before closing because of bad
weather or other factors. In such cases, money earmarked for completion can
be placed in an escrow account. If the work is not done in a certain time
frame, money from the escrow account can be used to complete the job. Speak
with your attorney or real estate broker to learn more.
Note: Be sure you have enough
time for a through walk-through and that all the utilities are turned on
during your walk-through.
Closing
Settlement, or closing, is the final step in the home-buying process. This
is the time when seller is paid, title is transferred, and all elements of
the sale agreement are completed. Learn what your closing costs will be. Closing
brings together all the players in the transaction - buyers, sellers, brokers,
lawyers, lenders, title insurance companies, termite inspectors, tax collectors
- so there are several things you'll need to consider:
- Settlement papers. Several
days before closing, tell the settlement agent (the party conducting the closing)
that you want copies of the settlement papers made available to you and your
attorney at least a day before settlement. Review these papers to ensure
that you are receiving all the credits to which you are entitled, and to
be certain that no extra costs are being charged.
