If you’re using an agent, he or she does the legwork of checking the prices of comparable homes in the area (“comps”) while you make your decision. Together, you will then balance an optimal selling price against the current demand in the marketplace to come up with an offer. At this time, you can decide whether some of the “points” (loan origination fees) or closing costs should be covered in the seller’s half of the agreement. These fees often run between 2 and 4 percent of the price of the home.
Making a Deal
Here is where your agent proves to be your strongest ally. Many people are uncomfortable with the negotiating process, and having an agent takes much of that unease away. Your agent is also there to handle any counter-offers that come back from the seller. Since a sale can be a stressful situation for both buyer and seller, it’s valuable to have someone in your corner who can logically explain and detail the reasoning behind an offer or counter.
Ultimately, you and the seller will agree to a price and any conditions (“contingencies”) placed in the contract, like the amount of time the seller can remain in the home, or the seller’s need to finalize the purchase of a new home. You will pledge to put an agreed-upon amount of money into escrow to show your good faith in fulfilling the contract. Last, you’ll set a closing date. Congratulations – you’re halfway home!