In the home buying process, there are many steps. In my previous blog Finding a Home in Petaluma, CA, I talked about what is involved in identifying the home on which you wish to make an offer. In this installment, I will discuss the exciting, and possibly daunting process of making an offer on a Petaluma, CA home.
1.) Deciding how much to offer -Once you have identified the home you want to buy, your agentwill likely prepare a Comparative Marketing Analysis to determine what a good price to offer would be. This, in combination with how many other people are making offers at that time will help to quantify how high or low your offer should be.
2.) Writing the Offer - The offer will be written on a contract. The current California Association of Realtors contract is eight pages long. It outlines the details of your offer, such as: a.) the purchase price; b.) the loan amount; c.) amount of your down payment and d.) close of escrow date, along with all the transaction details and specific dates by which buyer's and seller's actions are required.
3.) Submitting the Offer - Usually accompanying the offer is a prequalification letter provided by your mortgage broker and the initial deposit check. In Northern California, this check is usually written to a Title Company. The check will not be deposited until the offer is accepted.
4.) Seller's Response - The completed offer is submitted by the buyer's agent to the seller's agent who then presents the offer to the seller. The seller has the option to:
- accept the offer - we like this option. Everybody is happy from the start and we can move forward and open escrow.
- reject the offer - this is a definite bummer. If your client is still in love with the house, they can always write another offer. Feedback from the listing agent about what didn't work for the seller in the first offer is always helpful.
- counter the offer - the seller sees potential in the offer but would like a couple of changes made. This could include altering any part of the initial offer made by the buyer. The contract is changed per the specifications noted in this document if the buyer accepts the seller's counter-offer.
- ignore the offer and let it expire - this is a bit of a slap in the face to the buyer. It doesn't happen often, but it does happen.
5.) Open Escrow or Begin Again - If no agreement was reached, the home search process begins again. If the buyer and seller have agreed to mutual
terms and signed the contract, escrow can be opened.
The next part of the process is Escrow. In my next installment, I will explain the details of the escrow process and what happens during that 30-day process.
Please look for my next installment: The Home Buying Process Demystified - Escrow in Petaluma, CA
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