What to Expect When Making an Offer on a Home: Expert Insights from Sonoma County Realtor Lindsey Samuelsen
There’s no way around it—buying a new home is an involved and, at times, complex process.
You start by getting approved for a loan from a lender, figure out what you can afford, and then go house shopping.
But what happens once you find something you like and decide it’s the perfect place for you?
To make sense of it all, we chatted with Lindsey Samuelsen, a local REALTOR® brokered by Vanguard Properties, about what to expect when making an offer on a home.
Here’s what she told us.
SOMO Village: Walk us through the process of buying a home. What are the key steps?
Lindsey Samuelsen: Before you even start house shopping, you need to get pre-approved for a mortgage with a lender. This is going to give you an exact figure of how much the bank will allow you to spend on a house and a mortgage.
Once you’ve received your preapproval, you can start shopping for homes in your price range. You’ll discuss the things you’re looking for, such as the size or location of a home, with your real estate agent.
Then, they’ll put together some options in your price range and you can start touring homes and find something you love.
From there, you’d move into the process of making an offer.
When you’re shopping for a home, what impact do market conditions have on your ability to buy a home?
Market conditions have a big impact. A seller’s market versus a buyer’s market are two different things.
If you’re in a seller’s market (less inventory than there are buyers looking for a home), you’re likely going to want to look at homes that are a little below what you’re approved for. That way, you have some flexibility if you need to consider making an offer over asking to compete with other interested parties. You also want to make sure you’re working with an agent who is local and well-connected, because they can often hear about off-market properties or coming soon listings that haven’t hit the market yet.
If you’re in a buyer’s market (high-interest rates leading to less demand and lower competition, or a surplus of available homes for sale), you can shop a little above your price range. It’s sometimes possible to get a home for less than asking, especially if it’s been on the market for a long time.
What happens after you find a house you like and want to submit an offer?
First, you want to check with your real estate agent and see if there’s an offer date.
Sellers and their Realtors do this when they believe there may be a lot of interest in the home. Basically, they won’t consider any offers until this date, which is often one to two weeks after the home hits the market.
Keeping that in mind, you’ll submit an offer aligned with the type of market you’re in.
If there are no other offers on the table, you could submit a solid offer at or even below the asking price.
On the other hand, if there are multiple offers, you may need to be a bit more aggressive. Your agent will help walk you through the best strategies here.
You can also keep in mind some of the other factors that impact how much competition there’ll be for the house.
For example, seller motivations make a big difference. If a seller wants to get out of there as soon as possible, things will move quickly—they probably won’t put an offer date on it and will be more likely to accept any offer that comes in.
Sellers who aren’t in a rush, however, may want to drum up some competition over a longer period of time in order to start a bit of a bidding war so that they can get the highest value for their home.
The price is only one part of the offer process. What else should people be aware of when they decide to make an offer on a home?
It’s important to look at whether or not there are any inspections or disclosures on file. The three main inspections that you should get with any home are:
Pest inspection to check for things like dry rot, fungus, wood-boring insects and rodent activity. General inspection: checks to make sure the house is functioning properly, notes any possible defects in electrical work, roofing, foundation, and more.
Sewer Lateral Inspection: inspects the sewer lateral line to make sure it’s functioning properly and doesn’t have any root intrusion.
Your agent can pull these up and you can do your due diligence to look through the title report and see the history of the home. If there are any issues you are aware of at the time of writing your offer based on inspections and reports, you can request a monetary credit or request a seller repair. If you find out, through your own inspections, that there are issues that were previously unknown, you can also ask for repairs during the escrow period.
Within your offer, you’ll also include any contingencies. There are four main types:
- Inspection contingency: You want to have a general inspection that checks out the overall integrity of the home and any material facts about the property. Pest inspections are also important as is the insurability inspection—is it possible to get the insurance you need for this home? If these things don’t pass, then the inspection contingency ensures you’re not locked into the sale. Securing insurance also falls within your inspection period. Make sure your home is insurable at a price you can afford before releasing this contingency. If it’s in a high fire zone, you’ll likely need additional insurance coverage.
- Appraisal contingency: This is to verify that the value of your offer matches what the bank is willing to lend. Basically, the bank needs to agree to the value of your house in order to finance it. If your appraisal is less than the offer amount, you will need to either bring cash to the table to offset the amount, ask the seller for a price reduction, or cancel your transaction.
- Loan contingency: This ensures that all the paperwork is in order and that you’ll get the loan at the close of escrow.
- Replacement property contingency: Unlike the others, this isn’t necessary and depends more on each situation. If you need to sell a home in order to buy your next home, you can include this contingency in your offer so that if your home sale falls through, you aren’t locked into your new purchase. Likewise, sellers can include this when they want to ensure they can find another home to move into before selling this one.
What is the general timeline for making an offer on a home?
When you submit an offer, you and your agent will determine an expiration clause—when your offer expires. The standard is three days, but it could be a matter of hours or multiple days.
The seller should review your offer and respond before it expires.
And, when they do, there are three possible responses:
- Rejection: The listing agent might not even respond if it’s rejected, so make sure you have your agent follow up if you don’t hear anything.
- Counteroffer: This is when the seller comes back with a different offer for you to consider. They will include their own deadline for when you need to respond to the new offer.
- Acceptance: Your offer is accepted by the seller and you can move forward.
Once both parties have agreed upon the terms of the offer, you are officially in contract and have three business days to deposit your earnest money.
Earnest money secures your offer with the escrow and title company. It’s typically 3% of the purchase price of the home. Pro tip: Never give your money directly to an agent, or the seller. Confirm deposit instructions with the title company before depositing or wiring any money.
The standard closing time after you get into a contract is 30 days, but the seller and buyer should agree on a closing time that works for both parties. If it’s a cash offer or there are no contingencies, it could be as short as one week. But for most sales, it takes at least three weeks to get a loan processed, so you’ll want to leave enough time to make sure everything is approved and formalized.
And if both parties agree to it, the closing time could also be longer, like 60 or 90 days. For example, sellers may need to give notice to their tenant to move out.
Are there any scenarios where a seller or buyer can back out?
After the earnest money is paid and you’re in contract, there are limited reasons either party can back out.
As a buyer, that 3% earnest money—with your contingencies in place—is protected for a limited time.
Let’s say something comes up in the inspections or with the appraisal or loan, you might need to cancel. The process for this is to complete a form and state which contingency you’re using to cancel. If it’s valid, the seller should accept the cancellation and you should get the earnest money back.
If they don’t accept it or think the reason isn’t valid, you may need to go through mediation or even to court to settle the dispute.
After removing contingencies and agreeing to go forward with the contract, it’s really up to the seller if they want to accept any cancellation. They might think they should keep the earnest money as damages or, again, go through mediation or court to settle the dispute.
On the seller’s side, the main legitimate way to cancel an escrow is if the buyer is not respecting the timeline of your agreed-upon contract.
For example, if you haven’t removed the contingencies by the deadline, they can issue what’s called a Notice to Perform. From there, buyers would have 48 hours to perform the action specified or risk the seller canceling. Otherwise, you as a buyer are generally protected as long as you honor your side of the contract.
Are there any differences between the process for presale and resale homes?
Because the process of buying a presale home is different than a resale home, there are some slight differences in how you make an offer.
Typically with pre-sale homes, the builder is going to make their own contracts that are different from resale contracts. Builders want to protect themselves in the event of delayed construction or other things, so there are fewer options for buyers to cancel contracts.
Another difference is that the deposit on a pre-sale home doesn’t need to be 3%—it can be whatever the builder wants. I’ve even seen it as low as $5,000.
However, sometimes when you purchase a presale home, you have the option to upgrade things like the flooring or countertops. Some builders will require you to pay for those upgrades in advance, and if you cancel at a later date, you’ll forfeit the money to pay for those.
Is there anything else new homebuyers should know about making an offer on a home?
It used to be really common to write a “love letter” to the seller, pleading your case for why they should sell to you. But our regulations discourage that because of potential ethical issues.
So, you can talk to your agent about it, but I’d recommend erring on the side of caution with that.
Another thing is to get creative. The strongest offer isn’t always the highest price—there are other things you can do that are attractive to a seller, too.
You can always ask for different things as a buyer. Perhaps it’s some of the furniture they have or you want them to leave their boat behind… I’ve even seen people offer free tacos for a month! There are all sorts of creative things that can be part of your offer on a home and contract with the seller.
If you’re considering buying a presale home, reach out to Lindsey today via email at firstname.lastname@example.org or by phone at 415-971-7437.
Learn more about Sonoma County’s best presale homebuying opportunity.
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About Lindsey Samuelsen
Lindsey Samuelsen is a licensed REALTOR®, brokered by Vanguard Properties. She has helped dozens of people with new home presales or selling their current house. Lindsey specializes in presale homes, land sales, first-time home buyers, real estate investing, and probate sales.
Being a REALTOR® is her dream job and she loves helping people find their new place to call home. Lindsey grew up in Petaluma and now enjoys living in a newer Rohnert Park neighborhood, so she really knows the ins and outs of living in Sonoma County!
In her spare time, Lindsey loves experiencing Sonoma County by hiking, going to yoga, trying new restaurants, or checking out local live music.