Once you’ve found the home that you want to buy then it’s time to put in an offer. Hopefully, you’ve done your homework already and you’re ready to make that happen but some home buyers may not have done that yet. If you haven’t yet started on getting everything that you’ll need in order there’s some information below that you can use to help. Also, you should sign up for my weekly emails with home buyer tips and info at the bottom of this article so you’ll have all of the information you’ll need when the time comes.
I’ll talk about a couple of common scenarios that home buyers may find themselves in when they’ve found the home that they want to buy. The first is the home buyer who hasn’t seen the home in person and the second is for the home buyer who’s toured the home and is ready to make an offer.
If You’re Not Working with an Agent Yet
If you’re only shopping for homes online and maybe checking out an Open House here or there the first thing that you’ll need to do once you’ve come across a home that you want to buy is to schedule a showing. You’ll want to see the home in person to make sure it really is everything that you expect it to be. To schedule a showing you can click the ‘Get More Info’ or ‘Schedule a Showing’ on whatever website you found the home on. These websites, including Zillow and Realtor.com, will send your contact information out to a number of real estate agents who “buy leads” from those sites. You can expect your phone to ring pretty much right away (and keep ringing until someone gets through to you). The agent that reaches you may or may not have any information about the home or the neighborhood, it’s a roll of the dice. You should expect the agent to “qualify” you to make sure that they’re showing the home to someone who’s ready to buy now and is financially qualified to buy the home. You should expect to be asked these questions . . .
- Are you currently working with a real estate agent?
- Have you been pre-approved for a mortgage loan for the asking price or more?
- Can you send a copy of your pre-approval letter?
- When can we meet to discuss the home buying process?
A lot of home buyers get frustrated with these questions and that’s completely understandable. You expect that scheduling a showing should be as easy as setting up a time to see it and going for a look. You didn’t expect the Inquisition and phone calls from several agents who’ve been given your contact information. Agents ask these questions for a few reasons . . .
- First, they want to make sure that you don’t fall in love with a home that’s outside of your budget.
- Second, they don’t know who you are and are about to go into a house with you so going through the loan approval process can help make sure they’re safe.
- Third, they know that the mortgage loan approval process can take a few weeks and this home may no longer be on the market by the time you’re ready to make an offer.
My suggestion to avoid all of this is to find your agent long before you find the house. A good agent will make sure that you’re all set up with your mortgage pre-approval letter and that you have everything you need ready to make an offer. Your agent will be your one point of contact when you find a house you love and you want to schedule a showing so you don’t have to go through this every time you come across a great house.
Once You’ve Seen the House In-Person
If you’re already working with a real estate agent you’ll contact your agent to schedule a showing. The agent will contact the seller’s agent or the seller, typically through a showing scheduling service, to arrange a showing. If you decide to move ahead and make an offer your agent will typically . . .
- Contact the seller’s agent to find out if there are other offers that have been submitted.
- Get a copy of the Seller’s Property Disclosure Statement for your review (this documents the seller’s knowledge of the condition of the home).
- Put together an assessment of value based on the sales prices of recently sold similar homes in the neighborhood and demand for similar homes in the area.
- Help you decide on the offer details including the offer price, settlement date, amount seller will pay toward closing costs, acceptable loan terms, which inspections will be performed and how long you’ll have to perform those inspections, what personal property will be included in the sale, the acceptable terms of the mortgage, and more.
- Put the offer details together in writing and you’ll sign the offer documents.
- Get a copy of the pre-approval letter from your lender to include with the offer. This is necessary to show the sellers that you can finance the home at the offer price.
- Send the documents to the seller’s agent and call to verify receipt (this is critical).
- Discuss your offer and it’s merits with the seller’s agent to help them make the case when they present your offer to the sellers.
After You’ve Made Your Offer
After you’ve made your offer one of three things will happen . . .
- The sellers will make a counter offer that you can negotiate or reject. If negotiations work out and you come to agreement then you’ll move on to the next step.
- The sellers will sign your offer and you’ll then be “Under Contract” to buy the home. After this you’ll submit your mortgage application (the next step after getting loan pre-approval) and arrange for any home inspections that you’ve elected.
- The sellers will decline your offer. Typically this would be because they’ve accepted someone else’s offer or because your offer doesn’t meet their needs (ie, it’s way off from their asking price). It’s possible that the sellers will not respond to your offer which is another way of declining the offer.
There is a fourth possibility that you should be aware of which is that the sellers may have several offers and they will ask for the highest and best offers from everyone who’s submitted an offer. Technically speaking, this is a rejection of all offers so it kind of falls under #3 above. If you’re in a multiple offer situation and the sellers have asked for the highest and best offers then you can re-submit your first offer or change the offer to make it it’s absolute best. This isn’t a time to leave room to negotiate since there may not be any back and forth as the sellers will simply choose the best of the bunch, sign the documents, and get their home under contract with the best offer they have in hand.
Hopefully, this helps answer the question of what happens once you’ve found the home that you want to buy. For more information about buying a home in Philadelphia, please join my weekly emails with tips and info for home buyers. You can join at the link below.