I made an offer on real estate I want to buy, now what?
Here is the rundown with regard to offers which have been written and submitted, or about to be.
First, we will make sure that the offer is complete.
This will consist in us gathering the following documents from you.
What documents constitute a “good” real estate offer?
- Proof of Funds – If you are going to be making any type of down payment. We will need the copy of a bank statement showing the amount of money required to close with the loan type you are using. Examples: If you are a Veteran and using a Veterans Administration (VA) loan where no downpayment is required, you will still have to have an account balance covering your deposit. If you are using an FHA loan, you will need a bank account showing 3.5% down in the account, at least. If you are using some type of conventional loan, 3%, 5%, 10%, 15%, 20% and more, the same rule applies regarding having a bank account or investment account showing the proper down payment related to the offering price.
- Copy of a Deposit Check – This is something that was actually taken from the buyer at the time of the offer, cashed and deposited back in the day. When we first started real estate, a client’s deposit check was taken and deposited into an escrow account. Today that has changed. Today the deposit check is merely a showing of proof. The actual check is not taken by our team. It’s copied and returned to the home buyer. If all works out and the seller accepts our buyer’s offer, we will direct them how and where to get the deposit money to the proper escrow company.
- Pre Qualification – Pre Approval – Underwriter Approval – These are three types of approval letters that most lenders are able to generate. The Top Level and most respected is an Underwriter Approval. It is a good strategy to have your “letter” match in the amount of your offer. It would also not be a shock, even if you have a complete underwriter approval, for the seller to have you vetted, by means of a double app, with their own lender to ensure you are capable of getting the loan your lender said you were. Believe it or not, some lenders don’t do their due diligence when it comes to approving home buyers.
- Fico Scores – This could be asked for by the seller. Copies of the buyer’s credit scores are sometimes asked for and sometimes they are not.
- Love Letter – Sometimes we have our clients write about how much they are able to see themselves living in the home they are attempting to buy. We call this a Love Letter. If the home, condo or townhome is corporate or bank owned, or is a flip, the love letter step would be a waste of time, in most cases. However, if the property is owned by a human being – you maybe getting your best advantage by writing a love letter and including a picture!
After the documents are collected, now what?
After the offer has been explained, signed, and collected, we are now ready to submit the written offer and the other buyer documents spoken about above.
We will submit the offer in the way that the seller’s agent wants to receive the offer. Some want them faxed. Some by email(this is the trend today), some want them shared by a link to some type of cloud platform. In some cases, some agents, only deal in hand delivery. We make sure this step is done correctly for our real estate buyers.
We incessantly follow up with the sellers agent to ensure our buyers offer was received. We don’t stop until we get confirmation in writing by the real estate seller’s agent!
What happens next?
Now the seller’s agent should do their due diligence to present the offer received directly to the home seller(s) without delay. This “without delay” would be applicable in a perfect world.
However, in most cases the offer is not presented immediately. The presentation of the offer is going to depend on the time the home has been on the market, the activity with regard to the numbers of viewings, whether the seller’s agent is going to host an open house, in some cases this will depend on how “ethical” the seller’s real estate agent is.
Don’t Fret. We stay on this step like fleas on a hound dog and will keep you posted as to any and all developments with regard to presenting, receival and review of any offer we submit on your behalf.
Does the seller have to respond to my offer?
No – the real estate seller does not have to respond to your offer. They only have to, via their own realtor, have been presented with your offer in some way by their real estate agent.
To not respond to an offer received, however, is bad form. It’s rude. When dealing with real estate, all real estate sellers should respond even if to say the buyers offer was rejected.
What about multiple offers?
A real estate seller’s dream. Multiple offers means the home seller may be able to get more than they expected by having their agent pitt the home buyers against one another.
Typically, if the offer’s received are within reason, the seller will counter. If there is an offer received that isn’t in the same “ballpark” as the other offers received by the real estate seller’s realtor, those offers may be dismissed and round filed.
Know that a real estate seller, one that has a GREAT Realtor, is educated as to the home buying process within the current real estate markets. They are going to be looking at two primary things when reviewing offers. This is the Highest and Best Strategy.
- Highest – Which offer(s) are going to “net” the home seller the most money? Which offers are asking for closing costs and which are not? Which offers are waiving some of their contingencies, such as inspection and appraisal? At the beginning of the negotiation process, which offer is going to make the home seller the most money?
- Best – Which offer(s) are the strongest in the other areas? Such as Financing. Which offers have larger down payments? Which offers are cash? Which offers are using some type of government backed loan? Which financing type is going to be more solid when it comes to a “will close” standpoint for the home seller? Best could also equate to decreasing escrow time on the buyer’s offer. Maybe a buyer could state they will not ask for any repairs or credit to sweeten their offer, etc..
My agent told the seller to respond by _____________!
This was placed into the contract, back in the day, because the deposit check was actually cashed and deposited into an escrow account with every offer written. This “respond by” date assisted the real estate buyer in getting back their deposit if they did not want to move forward or if they did not get the home. This was also so the buyer’s agent could not hold the buyer’s deposit hostage in order to be in a position of advantage over them.
The ethical Realtors honor this time line. They pay attention to the contract and they communicate with the buyer’s agents if their seller is sick, out of town, on vacation, or in some other way unable to respond by the “expiration date” which was written within the buyer’s offer.
As stated – Ethical Realtors pay attention to this. Even if the seller’s agent does not pay attention to the expiration date, we do a lot of following up. We contact the seller’s agent to get updates, find out what is going on and how we are able to ultimately get what our home buyers want!
I’m Connor with HONOR and I’m glad to be of service to you and yours. Thanks for taking the time to read about Now that my Offer on real estate has been submitted, now what.
If you have an offer which was accepted – Then read what happens next after you have an accepted offer.