The initial offer is typically submitted in written form. We will also ask the buyer to submit a pre-approval letter from a mortgage officer when an offer is submitted. A pre-approval letter does not mean the loan is approved; it only means the buyer has been “initially vetted” by a mortgage officer.
Typically, there will be some ‘back and forth’, verbal negotiation on price and terms of the sale. Once the verbal terms are reached the buyer will put the revised terms in writing. As soon as we receive the revised form we will sign it and send a ratified copy to the buyer’s agent. There is no contract until all parties have signed the paperwork and any changes have been initialed by all parties. Verbal agreement does not constitute a contract.
The buyer will typically offer a due diligence fee and/or earnest money deposit with their offer. The due diligence fee and earnest money amount is completely negotiable. The due diligence fee is typically viewed as the buyer “compensating” the seller for removing their home from the market while the buyers conduct their due diligence assessments. The earnest money is an additional “good faith” gesture that shows the buyer’s willingness to purchase the home. The earnest money is usually held by the listing/buying firm or the closing attorney. Due diligence and earnest money apply to the purchase price of the home. The exchange of these fees does not usually occur until the contract is signed by both parties. Don't forget to deposit your due diligence check and prepare for the next phase of the transaction.
After the contract is ratified there will be many activities that take place prior to the closing of the transaction. You can expect the buyer to request access to your home at least 4 more times from the point of initial contract until closing. The buyer will typically need access to inspect the home, conduct an appraisal, verify repairs and conduct a final walk through. The buyer may not be able to conduct all their inspections in one day. Expect the following inspections to occur: home inspection, termite inspection, radon testing, survey, chimney inspection, etc.