If you are buying your first piece of Phyllis Frankel Realty Group property, you may wonder about what happens immediately following the initial offer placed on a home for sale. Although your realtor will be able to guide you as the process progresses, it is also important to educate yourself on the process of purchasing a home.
Although each individual purchase will vary slightly, here is what typically occurs after you have submitted your initial offer:
1. The seller’s agent will review the offer and submit it to the sellers. Once the sellers have reviewed the offer (they typically have up to seven days to respond), they will do one of three things: (1) accept the offer as-is; (2) counter offer; or (3) reject the offer. You can usually expect the seller to counter off, although a motivated seller may accept your initial offer. If the offer is much less than the sales price, you may risk having the seller outright reject the offer.
2. If the seller’s counter-offered, your agent will receive the counter offer and discuss the terms of the counter offer with you. You can either counter-offer their counter offer or accept their offer. You and the sellers may go back and forth a number of times before an agreement is reached.
3. Once the sales price and contingencies are accepted by both the seller and the buyer, a purchase agreement is signed and good faith money is given by the buyer. Good faith money, also commonly referred to as earnest money or hand money, is essentially a deposit given by the buyer to show he or she is serious about purchasing the seller’s home. The good faith money is usually held in escrow and applied to the buyer’s down payment at the time of closing.
4. A home inspection is done on the buyer’s behalf. Before a home sale can proceed, a home inspection is usually required. Some lenders demand a home inspection, although it is usually done by the buyer in an effort to uncover any defects the home may possess. If the home inspection report uncovers any defects or problems with the house, additional negotiations between the buyer and seller will take place. Depending on the results of the home inspection, you may also walk away from the sale of the home.
5. The closing process begins. Once the home inspection (and any other inspections, such as pest or radon inspections) has been completed, a closing company will start the closing process. Your agent will provide you with a list of things to take to closing and a closing date will be set.