When a buyer has decided on a house they like, it is time to make an offer. The buyer’s agent can guide them in deciding the amount of the offer. Realtors are skilled at examining the local market, the value of the house to come up with an amount that is both fair and competitive. If the seller makes a counteroffer, it is their job to negotiate, according to the buyer’s wishes.
When an offer is accepted, the house is considered under contract, and the buyer typically must pay some earnest money. This is about 1-2% of the asking price and is meant to show that they are serious about the purchase. Contingencies are another part of an offer. A buyer may say, for example, that the purchase is contingent on a favorable home inspection, or the seller putting on a new roof or performing some other repair.
Contingencies give a buyer the opportunity to back out of the deal and get back the earnest money if things are not taken care of to their satisfaction. But the contingencies must be spelled out clearly in the contract.
What’s different in 2021: Other than more virtual meetings with realtors, this part of the process hasn’t changed much. Because of the competitive market in 2021, however, there’s more of a chance of being out-bid on a house the buyer wants. This means they may be more likely to have to start their search over from the beginning—possibly more than once.