An unbiased guide to buying your first home

Real questions with honest answers


A: If you are using a real estate agent the agent will have all the information about the property including asking price as well the ACTUAL sales of other similar properties in the area. The agent will help you decide what sales price to offer as well as the terms of your offer. For example, do you have to sell another property or take some action to get the down payment. If so you may need some time must make this a contingency to your offer. The main contingency in most offers is securing the necessary loan to close. If you are already approved and know you your loan in place you may be able to drop the financing contingency which makes your offer more attractive to a seller and may make the difference if there are multiple offers. However, you must still have an appraisal contingency to make sure the lender agrees the house is worth the purchase price.

It is common for offers to be rejected and a counter-offer to be made. You then must decide how to proceed. Your agent will often offer good advice on how to proceed. Do not expect that your offer or counter-offer is be successful. Often sellers may ask for more than is reasonable or ask more than a property is really work on the off chance a sucker will come along. Do not be that sucker. There is always another house later.

If you offer or counter offer is accepted the procedure is different from state to state. In many states the offer is in the form of a binding contract and provides for the escrow to be established. An escrow in nothing more than in independent third person (in most states a licensed corporate escrow company with a bond posted). The buyers deposit and the signed documents go to the escrow company who holds them according to the terms of written escrow instructions (which may be incorporated in the offer or may require execution of a separate document). Remember that once all contingencies are waiver of satisfied your deposit is at risk and you will lose it if you fail to perform. The length of the escrow will vary depending on what you negotiated with the seller with the typical turn-around being about 90 days.


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