Step 6: Make an Offer
The offer is a written purchase proposal signed by you and anyone else that will be a part-owner. Generally, your REALTOR® will write the offer for you.
The offer should include:
- Price you want to pay for the house
- Amount of earnest money you are willing to commit (generally 1%-3% of the purchase price) and who will hold the money during the escrow period. Earnest money serves as a good faith deposit and is usually applied at closing to your down payment and closing costs.
- Option period/money– A non-refundable fee paid to the seller for an agreed upon number of days during which the buyer can cancel the contract for any reason without penalties
- Legal names of all of the buyers and sellers
- The address and exact legal description of the house
- The closing date
- Make sure the date is realistic – you will need time to obtain financing and have inspections
- Generally this is within 45-90 days
- How you intend to pay for the property
- A list of material goods you expect the seller to leave in the house, such as appliances, hanging lamps, and draperies
- All contingencies (things that have to happen or the contract may be canceled)
- If a loan is involved, the contract is usually contingent on the bank approving the loan
- Breakdown of who pays the closing, title, loan and escrow expenses and the cost of any required inspections
- Time limit for the seller to accept the offer
- Usually 24-48 hours
- Once you and the seller have negotiated a price and you have both signed the offer, you have a binding contract.