Explaining selling/buying process from offer to contract

Your real estate agent will help you decide how much to list your home for if you are the seller and how much to offer for a house if you are the buyer. This may depend on the market conditions, and the age of the home along with other factors. Sellers usually expect to negotiate their asking price. Buyers may want to ask the seller to pay some of their closing costs. Keep in mind that if the seller pays the buyer’s closing costs, it affects the offer.

For example, an offer of $200,000 with the seller paying $5,000 of the buyer’s closing costs is the same as an offer of $195,000. Your agent will prepare the paperwork and explain it to you. The seller likely will make a counteroffer. It is important to know if the seller agrees to the beginning offer, then the offer becomes a contract and both the buyer and seller are obligated to the terms of the contract once the paperwork is signed/ratified.

If the seller makes a counteroffer, it is technically a “new offer”. A buyer can accept it, reject it or make another counteroffer. This can be done verbally until an agreement is reached. At that time, the changes are noted and all the paperwork must be signed and initialed. The buyer’s agent will present the offer. Once you have reached an agreement and the contract is signed, the buyer will be required to pay an earnest money deposit, which is held in an account until closing.

At closing, the deposit amount is credited to the buyer. Typically, the deposit is between $500 and $1,000, but can be much higher. There are a lot of conditions and contingencies that may be a part of a real estate contract. Your Realtor can explain each and how they affect both the buyer and the seller.

Be sure the contract is explained before signing. It is a legally binding document. Realtors are not lawyers, but can handle your real estate contract and any questions regarding it.