First Time Homebuyer Guide - Part 4
by Pam Simpson
Desoto-Tate County Real Estate

Part 4:  I've found THE home - now what?  (Making an offer)

Okay...here is what we have covered so far:

Part 1 - Finding a Buyer's Agent
Part 2 - Finding the Right Lender
Part 3 - Finding the Home

Maybe you looked at several homes or you knew the first one you toured was the home for you.  What's next?  Well, its what we call "the offer".  It should be IN WRITING on a form where you and your agent will fill in the blanks.  Generally, there are several forms to sign ranging from the actual Purchase and Sale Agreement (contract) to certain disclosures. 

At this time, be prepared to write a check for the Earnest Money deposit.  This is a good faith deposit that tells the seller you are serious about buying their home.  I have found that the expected amount of deposit varies by location.  Ask your REALTOR® what is customary.  One exception is foreclosures.  If you are purchasing a foreclosure, the minimum amount of the Earnest Money deposit that the seller will accept is usually stated in the MLS.  Many foreclosure sellers will not accept personal checks and require certified funds for the Earnest Money deposit.  When you close on the purchase, you will get credit for your Earnest Money deposit (it will be subtracted from the purchase price).

Drafting the offer is where representation by your Buyer's Agent becomes invaluable.  There is a lot more to an offer than the purchase price.  Your REALTOR®r will know if there are any special items that need to be addressed in the offer.  Perhaps the home is served by a private well and not hooked up to city services.  You may wish to place a contingency in your offer requiring testing by the health department.

There are several matters to consider when making an offer.  Among these are:  price, seller concessions (closing costs you are asking the seller to pay for you), date of closing, date of possession, home inspections, financing terms, and earnest money deposit.  Generally, the seller is most concerned with their bottom-line net.  That is why they will look at the offer as a whole.  If you are going to ask for a large seller concession to pay your closing costs, you may want to re-think making a super low offer price.  Your REALTOR® should be able to offer advice based on market research and local customs.  

Your signed offer will be communicated to the seller either by their listing agent or your agent.  The method varies by locale.  In Northwest MS, the offer is generally given to the listing agent who presents it to their seller. 

The seller has three options when it comes to your offer.  They can (1) jump for joy and sign the offer as-is; (2) be insulted and flat-out reject the offer; or (3) decide to counter your offer.  Option 1 means you are officially under contract to purchase the house.  Option 2 usually means you should continue your house hunting.  You could come back with a more seller-friendly offer, but the seller may be so upset at an extremely low-ball offer that they will not want you to have their house under any circumstances.  Option 3 is what usually happens. 

A counter-offer means the seller thinks a deal can be reached, it will just require a little give and take.  Before you write an offer, you should consider the possibility of counter-offers and decide before-hand what you are willing to "give" on in order to get this home. 

The main thing to keep in the forefront of your mind in contract negotiations is the goal.  It is easy to get caught up in the "back and forth" and to even get emotional and upset.  As long as both parties are reasonable, there is a good chance you will be able to reach an agreement.

 Next in the series is Inspections.

This guide is designed to help first-time homebuyers better understand the overall process and steps in purchasing a home.  There will be 6 parts in this series ranging from finding an agent and lender and the correct loan program for you to what to expect at closing.  It is meant to be VERY elementary in order to help those buyers who are seeking guidance on where to start their quest for home ownership. 

***If you live an area other than Northwest Mississippi, the process could be a little different.*** 

The best guide is your LOCAL REALTOR®.  

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About the author:   Pam Simpson is an Assoc. Broker with Bob Leigh & Associates, LLC in Northwest MS.  Copyright©  2009 by Pam Simpson.  All rights reserved...***First Time Homebuyer Guide - Part 4***

FOR BUYERS:  Buying a Foreclosure, Finding a Home, Loan Info, Tax Credit, Interest Rates,
First Time Homebuyer Guide

FOR SELLERS:  Pricing, Selling Tips   

LOCAL COMMUNITY INFO:  Tate County Community, Memphis Community, Southaven Community, Hernando Community

MARKET REPORTS:  Foreclosure Report, Hernando MS Report, Olive Branch MS Report, Tate County MS Report

REALTOR STUFF:  NAR, Real Estate and Media, Real Estate Agents

OTHER:  Rural Life, Breast Cancer Awareness, Angel Food Ministries, Property Rights, Auctions

 Disclaimer:  All information provided by this author may be  based on information collected from several sources and is believed accurate but not guaranteed.