Step #4 — Making an Offer
The easy step-by-step tutorial designed to make home-buyers knowledgeable and confident.
If you’re here, you have found a home you are interested in — congrats! Now that you have found a home and want to write an offer, it’s important to be adequately prepared. If you need financing for this offer, you are required to include your proof of funds and a pre-approval letter. If you can pay all cash, then only the proof of funds will need to be attached to your offer. Read on for more details, or if you are a visually learner, watch below to find out what I mean.
It’s Time To Write Your Offer
What does it mean to ‘write’ your offer? On a basic level it means filling out a contract that will be submitted along with any relevant financial paperwork. For my clients, I like to take this a step further by creating an entire offer packet that really conveys to the seller that my client(s) are prepared and serious, while also helping them stand out as people — not just numbers in a contract. Here is what this offer packet includes:
(a) Letter from myself, introducing my clients
(b) Letter from my clients, telling their story and their connection to the property
(c ) RPA — Residential Purchase Agreement (this is the actual contract!) This is the most important section and includes your contingencies, their timelines, the terms of the contract, and the purchase price.
(d) Disclosures. Depending on your location there will be several disclosures that can be attached to help the transaction get a head start conveying you are truly prepared and serious.
(e) Pre-Approval & Proof of Funds
Once you have your packet all prepared and signed, your agent will submit it to the listing agent confirm its receipt. Now the ball is in the Sellers’ court. They can either accept, counter, multi-counter, or decline. Acceptance is just what it sounds like. The seller agrees to your terms and contingencies and just signed to accept and open escrow. But this doesn’t always happen so easily — even if the seller(s) agree to your purchase price, its normal for the sellers to have their own terms and conditions that they would like to include in the contract. Meaning that the seller will ‘counter’ your offer.
Normal Counter Offer vs. Multiple Counter Offer
If the seller would like to include their own terms and conditions into the contract, then your offer will be returned to you with these added stipulations. This is called a counter offer. As far as counter’s go, you could either get a normal counter offer or a multiple counter offer. Normal counters are just between you and the seller, no one else. You negotiate the terms of the transaction until you both are in agreement, or you do not open escrow. Sometimes, in popular cities like Los Angeles, you will not be the only buyer submitting an offer on a property. When this happens, the seller(s) often counter multiple buyers to see which buyer will come closest to agreeing with the sellers terms. This results in a “Multiple Counter Offer” which will be the title on the top of the form. In this case you are considered to be in a “bidding-war”. More details in dealing with this and creating a strategy will be addressed in detail in future YouTube videos.
If you & the seller cannot come to an agreement, or if another buyer is chosen by the seller, your offer will be declined and your hunt continues.
Do not fret! There are several strategies to win a bidding war, but that’s for another video — and for you and your agent to discuss!
In my next video I’ll go over the Counter’s process in more detail, and include what it means for your offer to be accepted (woo-hoo!). Remember, this interactive tutorial was designed to make everyone to feel like they don’t need to be an expert in order to confidently buy a home. If you have any questions on the topics I’ve gone over above, don’t by shy, reach out and ask for clarification! This free guide through buying a home is about empowering YOU, the buyer, as you set out on your mission to purchase a property.
For the fastest response you can comment on my Step #4 Video or reach out on social media here.
Stay tuned next week for Part 5: Counters & Acceptance.
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Looking forward to seeing you again next week!
-Lauren “Glasses” Biedenharn
