When you find that perfect house the next logical step is to make an offer to purchase. The process of making an offer can greatly vary from house to house. However some of the basics are always the same.

Some offers can be presented verbally (but not all agents like to do that). Therefore, most require a lot of paperwork. If you are buying a foreclosure or short sale they come with a bunch more disclosures and disclaimers.

The good news is that with modern technology the paperwork is pretty quick. Things to be discussed when making an offer include closing costs, home warranty, due diligence period, settlement date, due diligence fee, earnest money,personal property, and of course offer price.

Offer Price: The obvious topic is the offering price. However, the price can be the product of other items. For example, if you need seller paid closing costs (to keep your out of pocket expenses low) then your price may need to be a bit higher. If you need no closing costs, home warranty, or other seller concession then your price can be lower.

Home Warranty: If you are a first time buyer and you are buying a home with a little age, then you may want to request a home warranty. It is a value of $350-500 but can help you offset an expected expense down the road for perhaps an air conditioner repair.

Due Diligence: The due diligence period is the time you are “buying” for your inspections. There is usually a due diligence fee that is non-refundable. In a buyers market this fee is usually nominal rarely more than a couple of hundred dollars. Then during the due diligence period you get the right to do any and all inspections to determine if the house is in a condition that you want to move forward to with the purchase. Likewise, during this period you can walk away for any or no reason at all and get your earnest money back.

Earnest Money Deposit: The earnest money deposit is money you put down that is credited back to you at the closing table. If you cancel the contract during the due diligence period your earnest money is returned to you. The amount of earnest money is completely negotiable but on many homes will not exceed $1000 and is often around $500.

Closing Costs: If you are in need of or request seller paid closing costs it is a good idea to consult with your lender prior to making an offer. They can take the specifics of the property and offer amount and tell you approximately what you need to request in seller paid closing costs. This way you get the most amount possible without leaving money on the table that could be negotiated off the purchase price. A good rule of thumb is about 3-3.5% of the purchase price.

Personal Property: There may be specific items in the house that are not attached or otherwise fixed to the real estate. Therefore, you may want to include them in your offer to be left with the house. If you are getting a loan you do not want to put a lot of personal property on the contract. Typically multiple personal items are done with a bill of sale outside of the contract. Customary personal items that you may want written in the contract include the refrigerator, free standing oven, and maybe a microwave. Much more than those items and you will want to create a bill of sale that is contingent upon the successful close of the real estate purchase.

Settlement Date: The settlement date is also called the closing date. If you are getting a loan you will typically need a minimum of thirty days to close. If you are getting a unique loan like a rehab or USDA, or even VA you will want to allow longer. Usually 45 days from the offer being accepted to closing date. If you are paying cash you can often close in about two weeks or less, assuming the seller can be ready that fast.