Recently updated on February 11th, 2023 at 02:17 pm
What You Will Read In This Article
Purchasing a home can be one of the most exciting and gratifying experiences in life. However, the home buying process can sometimes be overwhelming, and most likely you will have many questions about it, especially first-time home buyers.
For instance, who delivers your offer to the seller? This depends on a few variables.
In a real estate deal, just you and the seller may be involved, or the same real estate agent might represent you and the seller or you may each have separate agents.
Who is involved in any real estate deal will affect the roles and responsibilities of each party. So read on to learn more about this intricate process.
Roles and Responsibilities In a Real Estate Offer
Everyone participating in a given real estate deal will have their share of costs and responsibilities.
- Home Inspection: The cost of a home inspection can save the buyer money in the long run. An inspection protects you from hidden costs for repairs after purchasing. The average cost ranges from $250 to $700.
- Appraisal: The mortgage holder will often require one before purchase. If not, a real estate appraisal can provide peace of mind that the buyer is making a good purchase. A typical cost is about $350
- Land Survey: A survey is not required unless the buyer requests one. You may want a survey if you plan to install a fence or make other improvements near the property line. The average cost for a land survey is $550.
- Closing Fees: Both the buyer and seller have specific closing fees. The closing fees cover the costs to a third party handling the closing and managing funds during the transaction. Escrow fees usually equal 1% of the sale price.
- Title Insurance: The buyer purchases title insurance for the lender. Title insurance ensures that no third parties can claim ownership of the property. The average cost is $500-1000.
As the buyer, you are responsible for the cost of a home inspection and appraisal. You will purchase title insurance for your lender and pay your closing fees. If you need help, you can have a buyer’s agent representing your interests throughout the home purchase process.
- Real Estate Commissions: The seller is responsible for commissions even if the buyer has a separate agent. Real estate commissions are usually 5-6% of the sale price.
- Closing Fees: The seller and buyer have specific closing fees.
- Pre-inspection: The seller is not responsible for a home inspection, but they may want to conduct one to know what issues potential buyers could bring up. Or they can fix any problems that would affect the sale price. Inspections cost about $250-700.
- Home Warranty: There is no requirement for home warranties, but It can help attract buyers to have a warranty and costs about $300-500.
- Real Estate Transfer Taxes: The cost of real estate transfer tax varies widely based on location.
A buyer’s agent is a valuable role in the real estate transaction. They typically are responsible for the following tasks:
- Help you find what you are looking for in a home.
- Schedule showings at home that fit your criteria.
- Write offer letters and counteroffers.
- Assist you in scheduling an inspection.
- Guide you through the closing process.
Seller’s Agent or Listing Agent
A seller’s agent is a valuable role in the real estate transaction too. They typically are responsible for the following tasks:
- List the property for the seller.
- Get the best price for the seller.
- Manage the legal transaction and paperwork deadlines.
- Present offers to the seller.
- Negotiate the terms of the sale with the buyer or buyer’s agent.
- Show the home to potential buyers.
- Assist the seller at closing.
Read More: Listing Agent vs. Buyers Agent
Real estate attorneys can serve in a few different capacities during a home sale. The seller, buyer, and lender should all have legal representation.
Purchasing a home is a complex legal transaction. Hiring an attorney can protect your interest and help you avoid any legal pitfalls.
The cost for an attorney varies widely. Some charge an hourly rate, but others charge a flat rate.
A real estate attorney can:
- Prepare and review documents and contracts for the sale.
- Assist you at closing.
- Oversee the closing.
- Recording the home sale on public records.
A mortgage broker serves as an intermediary between borrowers and lenders.
Brokers are not the same as loan officers at a bank in two ways. They can offer loans from several financial institutions. They do not work for the bank that is funding the mortgage.
The mortgage broker earns a commission at closing paid by the borrower, the lender, or both.
- Brings borrowers and lenders together.
- Gather financial information from the borrower to pass to the lender.
- Presents loan options to the borrower from various lenders.
- Passes paperwork from the borrower to the lender.
- Determines the proper amount for the loan based on the borrower’s loan-to-value (LTV) ratio
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Who Is Responsible For Delivering the Offer To The Seller?
Seeing the various roles and responsibilities in a real estate deal, you can understand why responses to this question depend on your situation.
When You’re Working With an Agent
When you work with a buyer’s agent, your agent will deliver your offer to the seller’s agent.
Your offer will include an offer letter and financial documentation. You’ll need to provide a mortgage pre-approval letter or proof of funds if you are paying cash.
If the seller is not using a listing agent, your agent will present your offer directly.
If you don’t have a real estate agent, you will handle all the negotiations and paperwork yourself.
When You’re Not Using a Real Estate Agent
If you don’t have representation for buying a home, you can submit your offer to the listing agent yourself. Be sure that you include all the necessary documentation.
The seller may have listed their home as for-sale-by-owner (FSBO). In that case, you will negotiate directly with the seller.
Dual Agents: When You and The Seller Are Working With the Same Agent
The dual agent helps you write your offer and then delivers it to the seller. There are a few caveats to be aware of when working with a dual agent.
One advantage is a streamlining of communication between you and the seller.
The situation does become delicate concerning the interests of the seller, the buyer, and the agent. The real estate agent becomes more of an arbiter than an advocate for either side of the transaction.
In some states, dual agency is illegal. Where it is legal, both seller and buyer must agree to dual representation.
Next Steps After Offer is Presented
Submitting an offer is one of many steps in purchasing a home. You will proceed based on the response you get from the seller.
Option 1. You Receive a Counter Offer
Ideally, you make an offer on a home, the seller accepts, and you move on to escrow then closing.
Reality looks more like a ping-pong game of negotiations. You should expect the seller to make a counteroffer no matter what you have offered.
The sale price is the main point of negotiation, but don’t fixate on that number. There are many other factors to bring to the table. You can negotiate over repairs, closing costs, and even appliances staying in the home.
Respond to counteroffers promptly. 24 to 48 hours maximum is customary for a response. The selling agent could call for a quicker decision in a hot market.
Your agent will communicate your response to the selling agent. Having a good buyer’s agent who is on top of the details for you is a great asset.
Option 2. The Seller Accepts Your Offer
You have likely gone through a few rounds of offer and counteroffer negotiations by the time a seller accepts.
Congratulations on having your offer accepted. Now the selling agent will disclose that the home is under contract. The seller may not accept any more offers once you are under contract but they could hold them as backup offers if your deal falls apart.
Option 3. The Seller Rejects Your Offer
It is rare for a seller to reject an offer outright without a counter offer. If it does happen, there are several possible reasons.
- Your offer was too low: Getting a deal by making a lowball offer is fantastic for a buyer. If a listing is new to the market, the seller is not likely to jump at a low offer. Know the listing details so you don’t go in too low.
- Your offer was too high: Offering way over full price on a home you fell in love with sounds like a sure way to proceed to closing. However, the listing agent may advise the seller to pass because the house may not appraise for the offer amount. In that case, the deal falls apart when you cannot get mortgage approval.
- Someone else made a better offer: Unfortunately, there is nothing more you can do if the seller accepts another offer.
- There is a variable commission structure: The seller is motivated to accept offers from buyers represented by the same agent to reduce the commission. The seller may reject any offers from buyers with a separate agent.
- Your offer did not address all the seller’s concerns: Usually, the listing agents will add notes for the buyer’s agent in the listing of terms that are important to the seller. A good buyer’s agent will help you address these concerns in your offer.
- The seller has personal reasons: A rejection with no explanation can be a huge disappointment. The seller may have some personal reason to reject your offer. Having a buyer’s agent who conducts themselves professionally can help smooth over situations like this.
If your offer is rejected, you do not have to give up hope. Unless the seller has accepted another offer, you can submit a new offer yourself.
Your agent can help you write a new offer and submit it to the listing agent.
Option 4. The Seller Ghosts You
When the seller is working with a listing agent, it is unlikely that you will get ghosted. It would be unprofessional behavior and bad real estate etiquette.
In an FSBO situation, however, the chance of the seller ghosting you increases. It is still unprofessional and poor etiquette for the seller to refuse to return calls or email. Unfortunately, you can only reach out so many times before you verge on harassing the seller.
If a seller ghosts you, it may be a blessing in disguise. You don’t want to make a major financial transaction with a person who is not dependable, polite, and professional.
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Making an offer on a home is a process. There is much more to it than naming a price.
What’s Included in an Offer?
Your offer will include more than the price you are willing to pay for the home.
- Your offer letter. Include your legal name, the seller’s legal name, the property address, and the offer price.
- Address any concerns the seller noted. These can be repairs, appliances included in the deal, or other concerns.
- Mortgage pre-approval letter.
- Proof of funds letter if you are paying cash.
- A personal letter. This component is not required but is a nice gesture that can make a good impression. Include some biographical information and tell the seller why you want to purchase their home. Selling a home is an emotional transaction as well as a financial one. Hearing the buyer express love for the home can contribute to your offer being accepted over others. Keep in mind, some agents may discourage this approach for liability reasons.
How Do You Write Up an Offer?
Your real estate agent will handle most of the paperwork when it comes to writing up your offer.
Your share of the work will be to sign a completed purchase and sale agreement as well as any disclosures and contingency addendums.
If you do not have a buyer’s agent, ensure all the legally required documents are with your offer. It may be worthwhile to consult with your closing attorney if you are not represented by an agent.
Does a Real Estate Agent Have To Submit an Offer?
Generally, the listing agent must present all offers to the seller. There are some exceptions.
The seller may have dictated that the agent dismiss any offer below a certain amount or that does not include specific criteria. In this case, the listing agent acts in their client’s best interest.
A conflict of interest can arise when a dual agent represents the buyer and seller. The agent ignoring an offer that would result in a lower commission is a breach of ethics and likely the law. In some states, dual-agency is illegal.
If you suspect that your offer has been ignored, reach out to your agent. They can communicate with the seller or listing agent to find out if your offer failed to meet the seller’s criteria.
Is A Seller Required to Respond to Your Offer?
No. In a hot market, a seller might receive several offers at once. Generally, the seller will see all of them but is not obligated to respond directly to all of them.
A good listing agent will promptly disclose if the seller accepts another offer and place the property under contract. Your agent should keep up with this information for you.
If your offer does not receive a rejection or counter offer within 48 hours, reach out to your agent or the listing agent for information.
Does a Seller Have to Accept a Full-Price Offer?
No. You might think that making a full-price offer guarantees that the seller will accept it. A seller can reject any offer unless the listing agreement states they must accept a full-price offer.
Why would a seller reject a full-price offer?
- They accept an above list-price offer from someone else.
- The seller believes they underpriced the home.
- Their situation changed such that they are less motivated to sell.
If the seller rejects your full-price offer, you can choose to submit a new, higher offer. Or you can consider other properties.
There are several details to keep track of when making an offer on a home. A good buyer’s agent will help guide you through the process and keep up on all the required paperwork. Attention to detail and willingness to negotiate will be the strongest assets on your home buying journey.