Understanding the Terms
Prior to showing your home, and after a thorough evaluation with a realtor, you should have a realistic idea of the price, how low you’ll settle and what terms you’ll accept.
With this information, you are prepared. When an offer is presented, you’ll be able to compare it to your initial guidelines. Your realtor will evaluate these offers and, hopefully, arrive at one that comes closest to your objectives.
At the same time, however, your realtor will likely exercise some leveraging power with any other negotiable items. A realtor works on your behalf, considering all the factors, you as a buyer, and the seller, to work at an agreement that is satisfactory for both parties. It comes down to persuasion and negotiation. Your professional realtor has specialized training in this important area.
Evaluating the Offer
An interested buyer will present an offer to your Realtor through his or her agent. Your agent will discuss the offer with you, ensuring you understand all aspects. The offer is a legally binding contract which contains the following elements:
- The names of the potential purchaser
- Your name
- Property description
- Conditions of purchase including:
- price
- closing date
- conditions, easements, caveats
- survey
- home inspection
- An irrevocable date (you have until this date to accept, or sign back a counter offer)
- Mortgage details (such as assumable mortgage, sellerÕs buyback, or other arrangements)
Keep in mind that the purchase price is not the final price you will receive. That’s because you will have additional fees to cover from the sale of the home including:
- lawyer
- real estate agent
- bank (for the balance of your mortgage and for any prepayment or discharge penalties)
- taxes (if there are any outstanding)
You and your agent should thoroughly review every detail. If there is anything you don’t understand, ask!
Before you accept and sign the offer, it is a good idea to have your lawyer review the offer. This way, you can be confident nothing has been missed, everything is legally accurate, and your interests are protected.
Accepting the offer
When you are satisfied with the offer, you’ll want to accept it. To secure this contract, your realtor will ask the buyer for a deposit. Your agent will hold the deposit. Upon closing, the deposit will be applied to the commission owed.