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When you've found the home to buy, it's time to make an offer.  You will prepare a written offer, also known as a binder, to be presented to the seller. Typically there are forms that are filled out to make a formal offer. But if there are parts of the form that you don't agree with or would like to change, you can often make modifications to the form. 

When working with a real estate professional, unless you have a buyer's agent, always remember that the agent works for the seller. Make a point of asking your real estate agent to keep your discussions and information confidential, but don't count on it. Listen to your real estate agent's advice, but follow your own instincts on deciding a fair price.

Calculating your offer should involve several factors:

  • what homes sell for in the area
  • the home's condition
  • how long it's been on the market
  • financing terms
  • the seller's motivation for selling the home
By the time you're ready to make an offer, you should have a good idea of what the home is worth and what you can afford.

An offer usually includes an offer price, the proposed closing date, contingencies and the amount of earnest money to show that you are serious about buying the house. The offer should also state the timeframe under which the offer is valid.

After making your offer, be prepared for give-and-take negotiation which is very common when buying a home.  The seller may present a counter-offer to begin the negotiation process. Common negotiating points include appliances, closing costs, and repairs. 

The buyer and seller may often go back and forth until they can agree on a price.  You should always come in low and be prepared to negotiate up as necessary.  In some instances where the market is very hot for homes in the area you are looking, you may want to make a full-price offer or even an offer that exceeds the listing price, but these represent unusual situations and should be carefully considered before moving forward with such an approach.