So, you’ve found the perfect property and are ready to make an offer. But do you know who actually delivers your offer to the seller? Understanding how the process works can be a key factor in how effectively you can negotiate and ultimately, secure your dream home or investment property.
In the real estate industry, there are several players involved in the process of delivering your offer to the seller. Each has their own role and responsibilities, and understanding who does what can help you to better navigate this often-complex process. Let’s dig deeper into who these participants are and what they do.
Real Estate Agents
The most common person to deliver your offer to a seller is a real estate agent. These professionals serve as intermediaries between buyers and sellers in property transactions. They may represent either party, or in some cases, both.
A buyer’s agent represents you, the buyer, throughout your home buying process. This includes searching for suitable properties according to your preferences and budget, arranging property viewings, negotiating on your behalf and presenting your offer to the seller’s agent.
The seller’s agent, also known as a listing agent, represents the interests of the seller. They are responsible for marketing the property, screening potential buyers and presenting any received offers to the seller.
When you make an offer on a property, your agent will typically present it to the seller’s agent, who then delivers it to the seller. Even if there is no buyer’s agent involved, a seller’s agent is legally obligated to present all received offers to their client unless instructed otherwise by the seller.
In some U.S states like New York and Connecticut, real estate transactions must be handled by licensed attorneys. Here, instead of an agent, your attorney is the one who will draft and deliver your offer to the seller’s attorney.
Estate attorneys are responsible for ensuring the legality of property transactions. They review sales contracts, conduct title searches and manage the closing process. They can negotiate on your behalf, clarify legal jargon and advise you on any potential legal issues related to your offer or the property in question.
If you’re purchasing a home directly from a seller without an agent or attorney (a process known as For Sale by Owner or FSBO), then you might be the one delivering your own offer to the seller. This can be an intimidating process, particularly if it’s your first time buying a property or if you’re not versed in real estate law and negotiation tactics.
In such cases, it’s crucial to thoroughly research fair market values and local real estate laws, as well as to have a licensed professional like an attorney or appraiser review any contracts before signing. Direct buyers can present their offer face-to-face or via email, depending on what the seller prefers.
For properties sold at auction, it’s usually the auctioneer who formally delivers your bid (or offer) to the seller. During an auction, bidders openly bid against each other, with each bid being an offer to purchase the property. The auctioneer controls the bidding process and formally accepts bids on behalf of the seller.
Before bidding at an auction, make sure you understand how auctions work in your area, including any laws or regulations that govern them. You should also inspect the property ahead of time and do your financial homework. Remember that if you win, your bid becomes a legally binding contract to purchase the property.
If you’re bidding on a property online, the platform itself may serve as the intermediary that delivers your offer to the seller. Many real estate websites and mobile apps allow you to search for properties, view listing information, and even submit offers directly through their platform.
Usually, when you submit an offer through these platforms, it is sent directly to the seller’s agent or the seller themselves if they’re listing FSBO. Keep in mind that while online platforms can simplify the process of searching and bidding on properties, they can’t replace the personalized advice and negotiation skills of a real estate professional.
As you can see, who delivers your offer to the seller can vary depending on several factors like where you live, whether you’re working with a real estate professional, how the property is being sold, and more. Regardless of who delivers your offer, it’s crucial to be well-informed about each step of the process to ensure you’re making educated decisions that align with your home buying goals.
In most cases, property offers should be in writing for them to legally count. Whether it’s a printed document or an email, having written proof of your offer can protect your interests should disputes arise later. It also allows both parties to review and understand all terms before agreeing.
A written offer usually includes details like the property address, your offering price, contingency clauses (conditions that must be met before the sale is finalized), your desired closing date and any items included in the sale like appliances or furniture. After drafting your offer, it should be delivered to the seller or their representative (like their agent or attorney) for consideration.
Negotiating the Offer
Once you’ve delivered your offer, the seller may choose to accept it, reject it outright, or make a counteroffer. The process of negotiating an offer can sometimes be lengthy and complex, and is often where real estate professionals truly earn their commissions.
The seller’s response to your offer will depend on factors such as the current market conditions, how urgently they need to sell, and how reasonable your offer is compared to their asking price and the property’s fair market value. Counteroffers may involve negotiations on the price, contingencies, or other terms of sale.
If a seller counters your offer, don’t be discouraged. This is a common part of the property buying process. Review their counteroffer carefully, consult with your agent or attorney if needed and respond in a timely manner. Keep in mind, you don’t have to accept a counteroffer – you can either reject it or make a counteroffer of your own.
Offer Acceptance and Purchase Agreement
If the seller accepts your offer, congratulations! This is a major step towards owning your new home or investment property. At this point, both parties will sign a purchase agreement (also known as a sales contract) which legally binds you to buy the property under the agreed terms.
This document should detail all aspects of the sale, including the purchase price, deposit amount (also known as earnest money), closing date, included items, any contingencies and what happens if either party fails to follow through on their obligations. Once signed by both parties, you’re officially under contract and any changes must be agreed upon by both you and the seller.
Sometimes a seller may reject your offer outright. This can happen for various reasons such as your offer being too low, they received a better offer from another buyer, or they’ve simply decided not to sell at this point.
If your offer is rejected, don’t lose heart. Your real estate professional can guide you on the next steps, whether it’s making a new offer, looking at other properties or reevaluating your property search strategy. Remember, buying a property is often a process of negotiation and patience.
Contingencies in Your Offer
A crucial part of your offer is the contingencies – these are conditions that must be met for the sale to go through. Typical contingencies include home inspections, securing financing, appraisal, and title search.
The home inspection contingency allows you to have the property professionally inspected within a certain time period and, based on the results, negotiate repairs or adjust the offer price. The financing contingency protects you in case you’re unable to secure a mortgage. The appraisal contingency ensures that the property is worth at least the purchase price. Finally, the title search contingency ensures that there are no issues with the property’s ownership records.
The closing process starts once your offer is accepted and all contingencies are met. This process includes finalizing your mortgage (if applicable), conducting a final walk-through of the property, signing all necessary documents and paying closing costs.
Closing costs typically range from 2% to 5% of the purchase price and include fees for loan origination, appraisal, inspection, title search, legal services and more. Your lender should provide you with a detailed Closing Disclosure document at least three days before closing so you clearly understand all costs involved.
At closing, you’ll sign all final documents including your loan documents (if applicable) and transfer the remaining funds. Once all documents are signed and funds transferred, you will receive the keys to your new property. Congratulations, you’re now a property owner!
Frequently Asked Questions
1. What types of properties can I make an offer on?
You can make an offer on any type of real estate property that is for sale, whether it be residential, commercial, or land. The process of making an offer may vary slightly depending on the type of property and the seller’s preferences.
2. How is the offering price determined?
The offering price is typically based on the current market value of the property, which can be determined through a comparative market analysis or a professional appraisal. Other factors like the condition of the property, its location and market conditions can also influence the offering price.
3. Can I make an offer without a real estate agent or attorney?
Yes, you can make an offer without a real estate agent or attorney. However, these professionals have expertise in handling such transactions and can provide valuable advice and representation to protect your interests.
4. What happens if my offer is rejected?
If your offer is rejected, you can choose to make a new offer or look for other properties. It’s important to understand why your offer was rejected so you can improve your next one or adjust your property search strategy accordingly.
5. What is a counteroffer?
A counteroffer is a response from the seller in which they propose changes to the terms of your original offer. This could be things like a higher price, different closing date, removal of certain contingencies, etc.
6. How many counteroffers can be made?
There isn’t a set limit to how many counteroffers can be made. The number of counteroffers would depend on how well both parties are able to negotiate and reach an agreement.
7. What does it mean when an offer is under contract?
When an offer is under contract, it means that the buyer and seller have agreed to the terms of the sale and signed a purchase agreement. The property is then taken off the market while any contingencies are met and the closing process is completed.
8. What are contingencies?
Contingencies are conditions that must be fulfilled before the sale can be finalized. Common contingencies include home inspections, securing financing, appraisal and title search.
9. What happens if a contingency isn’t met?
If a contingency isn’t met, it could delay or cancel the sale. It depends on what the contingency is and how it’s addressed in the purchase agreement.
10. How long does the closing process take?
The closing process typically takes 30 to 45 days, but this can vary depending on various factors such as how quickly all contingencies are met and if any issues arise during this period.
11. What are closing costs?
Closing costs are fees and expenses you pay when finalizing your property purchase. These can include loan origination fees, appraisal fees, inspection fees, title search fees, legal fees and more.
12. What is earnest money?
Earnest money is a deposit you make when your offer is accepted to show that you’re serious about buying the property. This money is usually held in an escrow account until closing, where it’s applied towards your down payment and closing costs.
13. Can I withdraw my offer?
You can withdraw your offer at any point before it’s accepted by the seller. Once it’s accepted and you’re under contract, you may still be able to withdraw your offer if certain contingencies aren’t met, but this depends on the terms of your contract.
14. Can I make an offer on more than one property at a time?
While it’s technically possible to make an offer on more than one property at a time, doing so can complicate the buying process and potentially lead to legal issues. It’s typically recommended to focus on one property at a time.
15. What is a purchase agreement?
A purchase agreement, also known as a sales contract, is a legally binding document that outlines the terms and conditions of the property sale. It’s signed by both the buyer and seller once they’ve agreed on an offer.
A Final Word
Securing your dream home or investment property is an exciting endeavor, full of possibilities. Understanding the process in detail, from who delivers your offer to what happens after acceptance, aids in navigating this journey with confidence. Armed with knowledge, you can look forward to owning a new property, whether it’s your first home or an addition to your real estate portfolio. Happy house hunting!