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Making an offer

How much?
To ensure your offer is based on local market conditions, your agent will provide you with comparable sales information as well as comparable listings. A second criteria is making a sensible offer is determining how fast homes are selling, and whether they are selling for close to the asking prices. In hot markets, otherwise known as a 'seller's market' --well-priced homes sell for very close to the list price -- usually within five percent. In slower-paced markets where prices are flexible, the gap between the list and sale price could be more than five percent.
Once you make your offer, one of three things will happen:
1) It will be accepted.
2) It will be rejected.
3) you will receive a counteroffer.
If all goes well and the offer is accepted, you'll want to then proceed with a Home inspection. If it's rejected, you can still come back with a higher offer if you're really interested in the house. Fortunately, your agent is a professional negotiator and will work earnestly to bargain the deal in your favor.

A contingency is a specified condition that must be met before a contract is legally binding. The two most common contingencies in home purchasing are
1) the house must pass the home inspection, and if not, the contract could become void.
2) the borrower must obtain specific financing from a lending institution, but if the loan can't be procured, the buyer won't be bound by the contract. Essentially, a contingency protects you, the buyer, from being obligated to purchase a house based solely on an accepted offer.

Earnest money
Once an offer and its contingencies are agreed upon, the next step is to provide earnest money, proving the buyers commitment to purchasing the home. Also known as money given by a buyer to a seller as part of the purchase price, it binds a transaction and assures payment. Your escrow officer at your Title Company usually holds the deposit, and the amount will become part of your down payment.

Withdrawing an offer
Once you make an offer, can you take it back? In most cases the answer is yes, right up until the moment it is accepted, or even in some cases, if you haven't yet been notified of acceptance. However, ask your Realtor for professional advice on this matter.

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