Submitting an Offer to Purchase a Home | Austin Home Search

Congratulations, you found your dream home and now it's time to submit an offer to purchase this home. This is one of the most important aspects of the entire real estate process especially if you are purchasing a short sale property or a foreclosure.

In negotiating the purchase of your new home, the initial step will be to make an offer to purchase.  This offer should be in writing and accompanied by a Pre Approval Letter, Earnest Money, and Option Money. The written will include:

1. The amount you are willing to pay
2. Financing terms
3. Any personal property specifically included
4. Loan commitment date
5. Closing and occupancy date
6. Other contingencies and addendum's

The offer will be written on a standard and promulgated form approved by the Austin Board of Realtors. The amount you are willing to pay should be discussed very carefully with your Realtor. Your buyer's agent can provide you with a austin home search market analysis showing what has sold in the area and how that affects what you should offer on the austin mls listing. If the seller does not accept the initial offer, we’ll continue negotiating until agreeable terms to both the buyer and seller are reached. When both agree on the terms, the buyer completes financing and arranges for inspections.

Submitting an Offer to Purchase a Home > Pre-Approval Letter

A pre-approval letter will show the seller that you are able and qualified to purchase a home. Sellers are usually more willing to offer a “discount” on the home when they know that the buyer is ready, willing, and able to purchase the home. Getting pre-approved before finding a home will also make it less stressful when a home is found since all the paperwork will already have been submitted to the lender and you will know exactly what you will qualify for. There will be no surprises and no delays in closing on your dream home.

Submitting an Offer to Purchase a Home > Earnest Money

When a offer is submitted, we have to provide a copy of the earnest money that will be deposited with a title company. The earnest money is ONLY deposited once the offer is accepted and executed by all parties. It is not deposited during contract negotiations. The amount is usually 1% of the purchase price of the home. Example: when purchasing a $200,000 home, the earnest money would be $2,000. That money is credited to you at closing but given to the seller as liquidated damages if you are not able to closing on the property due to failure to perform under the terms of the contract. You will have the ability to terminate the contract during the option period in that case, you will get your earnest money back. You will not get it back if you just “decide” not the purchase the house and there are no reasons specified under the contract. The earnest money will be made out to the title company and is deposited as soon as the contract is executed - as soon as all parties agree to all the terms on the contract.

Submitting an Offer to Purchase a Home > Option Money

The option money purchases an option period - a specific amount of time that gives you the right to terminate the contract. The option money is ONLY deposited once the offer is accepted and executed by all parties. It is not deposited during contract negotiations.The option money is usually 10% of the earnest money. Example: when purchasing a $200,000 home, the earnest money is $2,000 and the option money is $200. That “buys” you 10 days to terminate the contract - a length of time known as the option period. All inspections should be scheduled during the option period in case you want to terminate the contract because of something that shows up during the inspection. It is also critical that we know for certain that you qualify to purchase the home during that period. It is your right to terminate the contract for any reason during the option period. If you terminate the contract, you will get your earnest money back but not your option money. You will only get your option money back if you purchase the home and if the appropriate contract section is checked - it would then be credited back to you at closing.

Submitting an Offer to Purchase a Home > Negotiating the Offer

Once the offer is submitted with all the necessary supporting document the listing agent will be presenting the complete offer to the seller. On average a buyer can expect to hear something back within 24 hours but that vary depending on other circumstances. If it's a short sale property it could take weeks and sometimes months to hear back. If you submit an offer on a HUD Foreclosure you could have to wait up to 10 days to hear back - if the property just came on the market. The seller has four choices, they can 1) accept the offer and execute the contract, 2) submit a counter offer, or 3) submit a "request to resubmit your final and best offer" - usually done when the listing receives multiple offers and 4) ignore the offer. It is very common for the seller to submit a counter offer.

Submitting an Offer to Purchase a Home > Conclusion

As you can see, submitting an offer to purchase a home is one of the most important aspects - most people will end up paying for their home for the next 30 years and a mistake could cost you tens of thousands of dollars. Having the right austin realtor is extremely important. Contact us at 512-963-4092 if you would like to schedule an appointment to discuss the home buying process.