Once an offer is submitted, a real estate contract is created, if the seller accepts. However, it is common for sellers to counter your offer, and this process can go back and forth until you agree on a final offer.
Several factors can impact your chances of receiving a favorable response during this time. Some of these include:
How does the timing look
Several factors could cause a delay in hearing back on your offer. One of many reasons is that the seller has already received other offers and needs to review them before responding. Another is that they might wait for their lender to go through the underwriting process before closing. In either case, you and your agent will communicate with the seller and their agent as best you can about when a response might be expected.
A good real estate agent must be prepared to negotiate with the sellers on terms such as an earlier close date or lease-back period should you need it. Having your loan pre-approved is also a great way to speed up the transaction, as this shows the seller that you are serious about buying their property and can move quickly when needed.
The seller does not legally owe you any response, and it is common courtesy for the listing agent to acknowledge receipt of your offer so that you know it has been presented (although it may not have reached the seller's hands yet). Your offer may be rejected or subject to a counteroffer in a competitive market.
What do the costs look like
In Texas, buyers and sellers share closing costs in the same ratio as the sales price. Sellers usually pay their agent a real estate commission, a percentage of the home's sales price. Buyers also pay for property taxes, escrow fees, recording charges, and inspection fees.
Your Realtor can help you determine which closing costs will likely be incurred when buying a particular property. Your Realtor can negotiate with the seller to cover some or all of these costs. This can be an incentive for a buyer and reduce the overall purchase price of a property.
After reviewing your offer, the seller can accept it or present a counteroffer. A counteroffer typically contains changes to the terms of the offer, including the sales price, closing date, and contingencies. The offer becomes a binding contract once both parties have agreed to it.
How much is the earnest money & option fee
The terms of the sale and purchase contract will detail the amount of earnest money (or option fee) the Buyer will provide as a good faith deposit. This amount typically ranges from 1-5% of the purchase price. The earnest money is delivered to the title company and held in escrow. If the Buyer terminates the contract during the option/termination period or cannot obtain financing within the specified timeframe, they will receive their earnest money back in full.
If the property requires significant repairs or a buyer wants to extend the option period for any reason, there are provisions within the contract to do so. This is where a real estate agent can help guide the process.
The real estate market is a delicate dance that requires buyers and sellers to follow agreed-upon protocols. One of the most critical aspects of this dance is the option fee and earnest money payment.
Any other terms
Your Realtor will help you with the purchase contract, which includes any contingencies that need to be met, such as an inspection or mortgage approval. Other terms may include your earnest money deposit, how you want to handle the closing costs, and any personal property included in the sale. It will also include state-required provisions and disclosures. This could include, for example, a clear title stipulation that you own the home free and clear of any liens.
This offer becomes a binding contract only when one party accepts it in writing. This is where negotiation can come into play – whether you're changing the price, closing date, or that basement pool table. Both you and the Buyer will have a chance to change this document.
Did you hire a real estate agent?
A real estate agent will understand the local housing market well and can help you assess whether the seller is likely to accept your offer or make a counteroffer. Real estate agents can also negotiate other terms of the sale, such as closing dates and negotiated repairs.
Once you and the seller have agreed to the price and terms of the sale, the next step is to sign a purchase and sales agreement. Your agent can assist with this and work with you to address any other contingencies (such as inspections) and financing requirements required by law in your area.
The contract will include the property address and legal description, your offer amount and the earnest money deposit, a clear title stipulation, and any other state-required provisions and disclosures. A real estate agent can also help you understand what the seller is looking for and how your offer can be more enticing to them, such as by providing flexibility on the closing date or offering to take personal property items with the sale.