Q & A: Making an Offer

Click a question to jump right to the answer:

  1. Are low-ball offers advisable?
  2. Do I need an attorney when I buy a house?
  3. How do I know what price to offer for a home?
  4. What are some tips on negotiation?
  5. What are the standard contingencies?
  6. What furnishings are included in the sale of a home?
  7. What is a contingency?
  8. What is the difference between list price and sale price?
  9. What is the difference between list price, sale price and appraised value?
  10. What must I disclose during the sale of my home?

Are low-ball offers advisable?

A low-ball offer is an offer on a house for far less than the listing price. There are numerous reasons one may put a low-offer on a home, such as: the buyer feels the home is overpriced, the home has been on the market for a long time, the buyer thinks the sellers may be motivated, or the buyer simply wants to see if they could get it for that low of a price. It is advisable to first speak with your real estate agent to gain their recommendations prior to presenting a low-ball offer on a home. Though a low-ball offer could be accepted, presenting a low-ball offer may offend the seller to the point that they refuse to negotiate any further.

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Do I need an attorney when I buy a house?

Each state has different legal requirements for real estate transactions, and many require the use of an attorney for the closing process. Speak with your real estate agent to learn more about requirements in your area and for attorney recommendations.

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How do I know what price to offer for a home?

There are many factors to consider when placing an offer on a home, such as the current real estate market (is it a buyer’s or a seller’s market), comparable home sales in the neighborhood, and the condition of the home (move in-ready or fixer-upper). Other items that can impact the offer price are the contingencies of the offer – will you be asking for closing cost assistance, the inclusion of appliances, extended finance contingencies, or the sale of your home as a contingency? A seller may be more likely to accept an offer that is low in price and has no extra contingencies over a higher price offer that includes a contingency on the sale of the buyer’s home. For this reason, it is best to use an experienced real estate agent who can formulate an offer that not only includes all of your needs and wishes, but is also appealing to the seller.

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What are some tips on negotiation?

One of the best assets to have during the negotiation of a home is a real estate agent. There are many factors to consider when negotiating the price of a home – the listing price, added contingencies, the proposed closing date, asking for seller assists, as well as the motivation of the seller and buyers, are just a few examples. A real estate agent uses their education and experience to formulate not only the best offer for their client, but also an offer that will attract the other party.

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What are the standard contingencies?

The two most common contingencies are: financing -which makes the sale dependent on the buyer obtaining a loan, and inspection - which allows the buyer to hire a professional inspector to asses the property. Other common contingencies are: appraisal, the sale of the buyer’s home, the purchase of the seller’s new home, or special requests such as the repair or replacement of specific feature of the home.     

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What furnishings are included in the sale of a home?

Generally, any fixtures that are permanently attached to the home are included in the sale. But, this is negotiable and therefore it should be specified in the contract prior to sale to avoid any confusion. Other non-permanent items can be negotiated as well, such as appliances, lawn equipment, and even furniture.

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What is a contingency?

A contingency is a stipulation added to a real estate contract that would make the contract null or void if the condition were or were not to occur. The addition of contingencies to an offer ensures that the buyer (or seller) is protected during the purchase process. A buyer or seller is able to add any contingency to their offer, but it must be agreed upon by the other party. Examples of common contingencies added to contracts are: financing, inspection, appraisal, and the sale of the buyer’s current home or property.

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What is the difference between list price and sale price?

The list price is how much the seller’s asked for when placing the home on the market. The sale price is how much the home actually sold for.

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What is the difference between list price, sale price and appraised value?

The list price is how much the seller’s asked for when placing the home on the market, the sale price is how much the home actually sold for, and the appraised value is the worth a professional appraiser estimated for the home. Lenders often require an appraisal prior to closing to ensure the home’s value is not less than the loan amount.

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What must I disclose during the sale of my home?

The disclosure of your home is a legally binding document revealing the history of your home. Each state has different laws and regulations on what must be disclosed by the seller of a home. Generally, you will be required to disclose any information that may affect the value or appeal the home. Your real estate agent can guide you through the process to ensure you have disclosed all necessary items.

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