Presumably you have arrived at a point that could be briefly outlined below:
1. You know what you want to buy, what you will pay and when you will pay it.
2. You have enough money to make the purchase and pay the associated closing and professional fees.
3. You have outlined the conditions (contingencies) that must be met in order to proceed to finalize the transaction.
4. You have a broker who has local knowledge, and has advised you on other conditions and terms that should be in your offer.
5. Your broker has taken the details of the transaction and has written them in an orderly, understandable and legal format.
6. You have read, understood and signed the offer and have written a check for your Earnest Money Deposit.
What Happens Next?
The first thing you do is ask for and receive copies of everything you have signed and that includes a photo-copy of your check. After that, retire to your favorite beach chair and wait to hear from your broker.
Your broker will contact the Seller or the Seller's agent and will inform them of the offer. Usually a phone call kicks off the dialogue, followed by delivery of the written offer itself. If the Seller is nearby, a paper copy can be presented for consideration. If (as is most common these days) the Seller would prefer to receive electronic copies of the offer, then the broker will either fax or scan and send a copy of the document you signed. This offer will have given the Seller a time-frame in which to respond.
The Seller will review the offer and respond:
Occasionally it's really easy, and s/he says yes, signs and sends the document back. If this happens you have an accepted offer, and that offer has now become a binding legal agreement.
Other times there are small details that need to be corrected (somebody's name is spelled wrong, the parcel number has a typo, etc), or larger issues that need to be negotiated (price, date of closing, certain furnishings not being sold with the property, etc).
Small changes can usually be corrected by hand right on the document, with the corrections initialed by the Seller - in this case the Seller will also sign the acceptance. The Buyer will need to initial the changes too, but at that point for all practical purposes you know you have a deal and can celebrate.
Larger changes mean you are back in negotiation with the Seller. It is now the Seller who initiates a written proposal/response. This response is known as a "Counter-Offer". Typically there are two methods of documenting a counter-offer:
1. Seller signs the original offer, with the caveat - "Subject to Terms and Conditions as noted on the attached Counter-Offer. All other terms and conditions of the original offer are accepted." Then the changes are outlined on a second form, signed by the Seller and sent off to the Buyer for consideration.
If the Buyer agrees to the changes, s/he signs the Counter Offer and the deal is done.
2. The entire contract is re-written with the changes included. The Seller will sign it, giving the Buyer a time-frame in which to respond. (Whilst it is probably neater to do it this way, it's not always possible due to time constraints, computer programs, etc. ) If the Buyer signs this the transaction is a "done deal."
Counter-Offers are submitted to the Buyer in much the same way as the original offer was submitted to the Seller. If the Buyer is not in agreement with the counter-offer s/he can make yet another offer. Subsequent responses are handled more or less as noted above. This process can continue back and forth for as long as you wish, but the fewer times it bounces around usually the better the outcome will be. Try your best not to over-negotiate. You may believe you deserve the refrigerator as part of the deal, but don't loose a fabulous house over a detail - forget the frig (and your ego) and concentrate on the real goal. Make a deal you can live with and get on with the process of closing. You'll be glad you did!
AFTER the agreement is signed ........ the period between signing a mutual agreement to a sale and closing the transaction is called the "Escrow" period.
Next week - Buy It, Part Three - What Happens in Escrow.