Making an Offer: What You Need to Know

The Basics of Making an Offer

When you find a home you love, making an offer is the first step toward purchasing it. Your offer is a written proposal that outlines the price, terms, and conditions of the sale. If the seller accepts it as written, it becomes a binding contract.

I will present your offer to the seller, either directly or through the seller’s agent. Standard forms are used to ensure the contract follows legal and local guidelines.

What’s Included in an Offer?

The offer should clearly outline the details of the sale, including:

• Property address and legal description

• Purchase price

• Terms (cash sale or mortgage details)

• Seller’s commitment to provide a clear title

• Closing date

• Earnest money deposit amount and conditions

• How taxes, utilities, and other costs will be divided

• Who pays for inspections, title insurance, and other fees

• Type of deed to be given

• Any required disclosures (environmental hazards, etc.)

• Final walk-through inspection rights

• Contingencies (conditions that must be met for the sale to proceed)

Understanding the Purchase Agreement

A standard Purchase Agreement serves as the official contract for the sale. You can negotiate and modify the terms, but the seller must agree to any changes.

Since real estate contracts must be in writing, I cannot present an offer unless all buyers sign the Purchase Agreement. When reviewing the contract, ensure everything is clear, including which personal property (appliances, fixtures, etc.) is included in the sale. To avoid surprises, specify the exact move-in date in the contract.

Key Elements of the Purchase Agreement

Sales Price 

This is the agreed-upon amount you’ll pay for the home.

Earnest Money Deposit

Earnest money (generally 1–5% of the purchase price) shows you’re serious about buying. If your offer is accepted, it goes toward your down payment or closing costs. If you back out without a valid contingency, you may forfeit it.

Title

“Title” refers to the legal ownership of the property. The seller must provide a clear title, free of unacceptable claims. Title insurance protects you from potential ownership disputes.

Mortgage Clause

If financing is needed, your offer can be contingent on securing a mortgage. If you can’t get financing, you may be able to cancel and get your deposit back.

Pest & Home Inspections

A pest inspection checks for termites and other issues, while a home inspection assesses the condition of the structure and systems (roof, plumbing, electrical, etc.). Buyers typically pay for these inspections (generally $300–$500 each). Additional specialized inspections (roof, foundation, pool, etc.) may be recommended.

Contingencies

Contingencies protect you by making the purchase conditional on certain factors, such as:

• Getting approved for a mortgage

• Receiving a satisfactory home inspection report

• Selling your current home

In a competitive market, too many contingencies can make your offer less appealing to sellers.

Negotiations & Counteroffers

If the seller doesn’t accept your offer outright, they may submit a counteroffer with different terms (such as a higher price or later closing date). You can accept, reject, or counter again. A contract is only binding when both parties agree to the final terms in writing.

Common negotiable items include:

• Who pays for repairs (such as termite damage)

• Closing costs

• Lender-required repairs

• Move-in date and rent-back arrangements

Closing Costs & Escrow

Buyers and sellers generally split closing costs based on local customs but everything is negotiable. The escrow company ensures all funds and documents are handled properly before the sale is finalized.

Withdrawing an Offer

In most cases, you can withdraw your offer before the seller accepts it. As your agent, I am here to guide you on how to do this properly!

What You Need to Know Before Closing

The homebuying process involves uncovering key details about the property. Here’s what to expect:

Transfer Disclosure Statement (TDS)

The seller must provide a Real Estate Transfer Disclosure Statement (TDS), which details any known property issues, hazards, or nuisances. If you receive the TDS after making an offer, you have 3–5 days to review it and cancel if necessary.

Home Inspection Report

A professional home inspector evaluates the home’s condition, covering:

• Structure, plumbing, electrical, heating/cooling, roof, foundation

• Potential maintenance issues

• Estimated repair costs

If problems arise, you can negotiate repairs, request a credit, or back out of the deal.

Pest Control Inspection

A pest inspection checks for termites and dry rot. If issues are found, the property must be treated and re-inspected before closing.

Smoke Detectors & Water Heater Safety

Before closing, the seller must prove the home has working smoke detectors and that the water heater is properly strapped for earthquake safety.