Making an Offer on Your Dream Home: What to Expect and How to Navigate the Process

Your diligent searching led you to a house you can see yourself living in happily. In this article we'll talk about what happens when you make an offer.

1. If You Love It, Act Fast

It's happened! You found a home you love. Talk to your realtor as soon as you know you're interested so they can advise you on how quickly you need to act. If it's a super hot market, you might have to make an offer same day. If you feel really unsure about proceeding, it's probably not the house for you. A good gauge is: would you be disappointed if someone else got the else instead of you?

Work with your realtor (and possibly lawyer) to decide out how much you want to offer. List price? Over? Under? If it's a cash offer, you likely have more leeway because the risk to the seller is lower and you can close faster (if that's something the seller desires). This is also where people may make other compromises to make their offer more appealing such as waiving inspection. Unless you really know what you're doing, we recommend against waiving inspection since this comes with a lot of risk. More on inspections soon.

Exercise: Offer components.
Other than the dollar amount, are there any other components to your offer? The answer can be no, but if it's yes, discuss with your realtor.

2. Submit Your Offer

You will need to sign a few things including purchase and sale agreement, seller disclosure letter, and a few others to make your offer official. Your realtor should facilitate that. These are legal documents so read them carefully. Use legal names and double check all information. Errors can happen (we're all human) so read carefully. We've found mistakes when reviewing offers before, so don't assume it won't happen to you.

If you're using a bank loan, you'll likely need to provide an underwriting letter along with the offer. You'll need to make sure the bank has the home address and offer amount to update the letter with first. If it's a cash offer you may have to provide proof of funds, which could be a letter from your bank. Connect your realtor and broker directly to make this easier.

3. Read the Seller's Disclosure

This was one of the items we didn't find described anywhere else in the other home buying guides we looked at. The good news is, it's not too complicated. One of the forms your realtor should provide you during this stage is the seller's disclosure. It's a legal document in which the seller's disclose details about the property's condition and what the seller says is staying with the house (or not). Ask about anything unclear or that you disagree with. You don't want to be surprised when that old pool table is still in the basement on moving day. Or the washing machine you thought was staying is long gone.

Exercise: Were there any surprises?

What if, anything, do you disagree with on the seller's discloser? Any surprises (good or bad)? Tell your realtor. It's not guaranteed, but you can ask.  

4. Wait

Now, all you can do is wait. for the seller to get back to you. They will likely talk to their agent who will talk to your agent who will talk to you. There may be negotiation, or maybe not. Consult your realtor and/or lawyer if you have questions.