The Home Buying Process
By Realtor.com

The Basics of Making an Offer:

A written proposal is the foundation of a real estate transaction.

Writing the Offer - Oral promises are not legally enforceable when it comes to the sale of real estate. Therefore, you need to enter into a written contract, which starts with your written proposal. This proposal not only specifies price, but all the terms and conditions of the purchase. For example, if the sellers said they'd help with $2,000 toward your closing costs, be sure that's included in your written offer and in the final completed contract, or you won't have grounds for collecting it later.

Elements of the Offer - REALTORS® usually have a variety of standard forms (including Residential Purchase Agreements) that are kept up to date with the changing laws. When you use a REALTOR® these forms will be available to you. In addition, REALTORS® cover the questions that need to be answered during the process. In many states certain disclosure laws must be complied with by the seller, and the REALTOR® will ensure that this takes place.

Presenting the Offer - After the offer is drawn up and signed, it will be presented to the seller by your REALTOR®.

What the offer contains – The purchase you submit, if accepted as it stands will become a binding sales contract, therefore, make sure it contains all the information you feel is important, this is the "blueprint for the final sale."

• Address and legal description of the property
• Sale Price
• Terms - for example, all cash or subject to your obtaining a mortgage for a given amount
• Title Work - Seller's promise to provide clear title (ownership)
• Closing - Target date for closing (the actual sale)
• Earnest Money - Amount of earnest money deposit accompanying the offer, and whether it's a check, cash or promissory note, and how it's to be returned to you if the offer is rejected -- or kept as damages if you later back out for no good reason
• Prorations - Method by which real estate taxes, rents, fuel, water bills and utilities are to be adjusted (prorated) between buyer and seller
• Inspections - Provisions about who will pay for title insurance, survey, termite inspections and the like
• Deed - Type of deed to be given
• Disclosures – Includes square footage disclosure, seller’s property disclosure and lead based paint disclosure (dependent on age of property)
• Walk-thru - A provision that the buyer may make a last-minute walk-through inspection of the property just before the closing
• Acceptance Deadline - A time limit (preferably short) after which the offer will expire
• Contingencies - Contingencies, which are an extremely important matter and discussed in detail below:

• If your offer says "this offer is contingent upon (or subject to) a certain event," you're saying that you will only go through with the purchase if that event occurs. The following are two common contingencies contained in a purchase order:

The buyer obtaining specific financing from a lending institution. If the loan can't be found, the buyer won't be bound by the contract.

A satisfactory report by a home inspector "within 10 days (for example) after acceptance of the offer." The seller must wait 10 days to see if the inspector submits a report that satisfies you. If not, the contract would become void. Again, make sure that all the details are nailed down in the written contract.

Negotiating tips  -

• Cash Buyer – Have verification of funds, i.e. bank or investment statements to include with offer  
• Pre-approved - You're already pre-approved for a mortgage and have no contingencies.  
• Motive - It's very helpful to find out why the house is being sold and whether the seller is under pressure.  This information is not normally disclosed.

Earnest Money - This is a deposit that you give when making an offer on a house. A seller is understandably suspicious of a written offer that is not accompanied by a cash deposit to show "good faith." A REALTOR® or an attorney usually holds the deposit, the amount of which varies from community to community. This will become part of your down payment.

How the Seller Responds to Your Offer-

• You will have a binding contract if the seller, upon receiving your written offer, signs an acceptance just as it stands, unconditionally.  The offer becomes a firm contract as soon as you are notified of acceptance.  If the offer is rejected, that's that, and the sellers could not later change their minds and hold on to you.
• the seller likes everything except the sales price, or the proposed closing date, or the basement pool table you want left with u may receive a written counteroffer, with the changes the seller prefers.  For example, "We accept the counteroffer with the higher price, but the pool table will be included with the sale of the home." 
• Each time either party makes any change in the terms, the other side is free to accept or reject it, or counter again. The document becomes a binding contract only when one party finally signs an unconditional acceptance of the other side's proposal.

Withdrawing an offer  - Can you take back an offer? 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. If you do want to revoke your offer, be sure to do so only after consulting a lawyer who is experienced in real estate matters. You don't want to lose your earnest money deposit, or find yourself being sued for damages the seller may have suffered by relying on your actions.