Summary: Real estate offers are key in home buying, covering sale price, closing date, included personal property, earnest money deposit, contingencies, and more. These elements help define the terms of the purchase and protect both buyer and seller. Working with a skilled real estate agent ensures a well-crafted offer.
Main Points:
- Sale Price: Central to the offer, balancing buyer budget and seller expectations.
- Closing Date: Establishes when the transaction is finalized, may require negotiation.
- Personal Property: Includes non-attached items like appliances, if specified in the offer.
- Earnest Money Deposit: Shows buyer’s commitment to the purchase.
- Contingencies: Protect buyers, covering inspections, financing, and more.
Real estate offers are easy to understand, at least in the big picture. Once a buyer finds the right home on the market, they work with their agent to create a real estate offer.
Sometimes called a house offer or property offer, this document describes the key details of the purchase. Those details include but arenโt limited to: the purchase price, closing date, personal property included in the sale, earnest money deposit, and contingencies.
Once the buyer submits the offer, the seller can choose to accept the offer, deny it, or submit a counteroffer. As Realtor.com points out, common causes for a counteroffer include the price, closing date, and personal property that the buyer wants to purchase along with the home.
With this foundational information in mind, letโs take a closer look at some of the most important parts of a real estate offer.
Selected Components of Real Estate Offers
The Sale Price
The value of a home is at the core of a real estate contract. The buyer needs the sale price to fit into their budget, and the seller wants to receive good value in return for the sale.
In highly active local real estate markets, offers from buyers may come in above the listing price for the home, giving the seller an advantage. In slower markets, the buyer may have more room to negotiate in their favor, especially if the house has been sitting vacant or the seller needs to complete the sale to buy a home of their own.
Closing Date
The closing date is crucial for helping each side understand when everything required for the sale has to be in place and the official transaction will occur. However, buyers and sellers may have conflicting needs in terms of the timeline. A sellerโs counteroffer could include a different closing date that better supports their needs.
Personal Property Included with the Sale
The home and land (the real property) are the most important part of a real estate transaction. However, personal property can and somewhat frequently is included in a sale.
The simplest definition is anything that isnโt attached to the home is personal property, including items like appliances. As a buyer, if you want the home you buy to include the dishwasher, washer and dryer, or similar items, itโs important to include that detail in the real estate offer.
Earnest Money Deposit
An earnest money deposit is a portion of the total sale price thatโs put in escrow until the sale is completed, as Rocket Mortgage explains. The purpose of an earnest money or good faith deposit is to show that the buyer truly intends to purchase the home. These deposits help to boost the confidence of the seller that the sale will go through.
Including earnest money deposits in the purchase offer is more common in competitive real estate markets. In less competitive markets, they may not be expected as frequently.
Contingencies
In the big picture, contingencies help to protect the buyer as they make an offer on a home. These conditions prevent buyers from becoming locked into a binding contract if their circumstances change or previously unknown issues emerge. The underlying concept is that, if a contingency isnโt met, the buyer, seller, or both, depending on the exact wording, can walk away from the process.
A contingency related to a satisfactory home inspection is common, although sellers may not accept them in highly active markets. Major issues with the structure or systems within a home may be present, but not visible to agents or buyers. A home inspection will help to identify major issues that could otherwise lead to substantial repair costs for the buyer.
A home sale contingency is common for buyers who need to sell their current home to help pay for their new one. The intent is to ensure the buyer can put that money toward the sale.
For buyers who need to secure financing, including a contingency that the sale will only move forward if they can secure a loan is common. Even with mortgage pre-approval, there is a slim chance that a lender could ultimately deny a loan. So, including this contingency is especially important.
Contingencies can also be used to negotiate the cost of the transaction without changing the sale price itself. The buyer could ask that the seller provide a specific amount to help with closing costs, for example.
The Right Real Estate Agent Helps You Make a Great Real Estate Offer
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Let Nikki help you find the perfect home and craft an incredible real estate offer: Start Your Home Buying Journey Today!