You Made an Offer on a House: So What’s Next?
Making an offer on a house—much like a marriage proposal—is equally exciting and anxiety-inducing.
After spending time viewing quality listings, and obsessively fiddling with mortgage payment calculators, you’ve finally found the house you want to share life with.
Together you and your White Brick real estate consultant created your offer. You proposed to the perfect dollar amount and closing terms. Maybe you even included a personal letter to show you are really committed the house. We submitted the offer.
What can you expect next now?
When the offer proposal is submitted you can expect one of three things.
Your offer is accepted, your offer is rejected, or the seller counters your offer
The Seller can flat-out reject your proposal
Your White Brick consultant will reach out to the sellers agent to understand why the offer was rejected.
Here are potential reasons:
Your offer was in competition with another suitor/buyer and their proposal was more attractive to the Seller’s desires
There was too large a gap between what you want and what the seller wants
If your offer flat out rejected, move on.
The Seller can counter your offer
If the seller counters your offer technically this is a rejection of your proposal, but you’re still in the game! It’s like asking your favorite girl out for dinner on Friday and she suggests Saturday instead. You can either accept the Seller’s counter offer, or present another offer to see if there are terms you are both happy with. This is not like other purchases; this is not a simple negotiation.
It is naive to reply to a seller’s counter offer with thoughts of ” splitting the difference”. After all, like in our dinner date example, if your girl is not available Friday, but offers you Saturday, asking to see her 30 minutes later on Friday may not be your best bet if you really want to see her. Taking too long to reply allows someone else to make a proposal, or can make the Seller unmotivated to negotiate with you. Negotiations can go back and forth until an agreement is reached, or one of you decides to walk away.
A contract for sale and purchase is more than the purchase price, there are many terms to agree upon, and usually the Buyer or Seller have key terms that are most important to them. Your White Brick consultant has experience navigating counter offers. The best negotiations are often accomplished by allowing the Seller to feel there is a win-win, not a compromise.
Your offer can be accepted
Once you reach the point of an accepted offer, things really get exciting.
Now is the time expediantly satisfy all contingencies in your contract and move forward to your closing. Though the process is slightly different in every state, this is what your punch list should look like.
1. Get your financing in order. Hopefully you went into the home-buying process with a pre-approval for a mortgage. Now is the time to move forward with your lender on the amount of money you need to buy the house. Work with your mortgage broker to put together the mountain of paperwork most lenders need to see before giving you the thumbs-up. Your lender will require an appraisal by a licensed appraiser as part of this process, and will usually let you know when that needs to happen.
2. Have the home inspected. An inspection isn’t required by most lenders, but your White Brick consultant recommends it. The timeline for inspections is written into your contact. Depending on the terms of your contract and what the inspector turns up, you might ask the seller to make some fixes, ask for a concession, or even just walk away.
3. Find homeowners insurance. Almost every lender will require you to have signed up for homeowners insurance before approving your loan. Shop around and don’t be afraid to negotiate. You can save money by bundling your homeowners insurance with any other kind of insurance you have, like auto insurance.
4. Move toward closing. While all of this is happening, your lender will be preparing your loan. The title company will want to see a survey, and if a recent one doesn’t exist, you’ll have to have one done.
During this period, most of the work happens behind the scenes, with someone on your team—real estate agent, lawyer, lender, title agent—popping up to ask for a document here and there. Your primary job is make sure you have your down payment ready. Don’t make any big purchases, because that can mess with your credit.
When everybody gives the green light and your loan is approved, it’s time to head to the closing table and officially buy your home. You’ll do a final walk-through of the property a day or two before closing to ensure nothing has been damaged and that all changes specified in the contract were completed. Sign on the dotted line, and you’re done! Now you can focus all your energy on moving into your new home