How to Make an Offer on a House

“I’ll take it!”  Is it as easy as that when you find a house that you really want?  Well, nothing is as easy as that!  Oral agreements are not enforceable in buying or selling real estate.  So when you get ready to get something that makes it official that you’re buying the house- it all starts with the offer- a written proposal that spells out all of the terms and conditions that both parties agree to.  An offer only becomes a contract once all parties agree to all of the terms listed in the written offer.

Where do you get the forms?  If you are working with a REALTOR®, they will have various forms that spell out the details of any real estate offer.  Keep in mind that there are disclosures required for different circumstances pertaining to federally regulated issues like lead-based paint disclosure, etc.  Your REALTOR® will know which regulations and disclosure are required for your situation- so I suggest you use the expertise available to you by working with a REALTOR®.  If you choose not to work with a REALTOR®, you will have to draw up an offer to purchase that incorporates issues that might be required in your area.  Laws and ordinances vary from area to area and need to be consulted before making the offer. 

The offer must contain: 

  • Address of the property
  • Sale price
  • Terms- how you are going to pay for the property
  • Assurance of clear title from seller
  • Target date for closing- could be tricky as nothing is 100% guaranteed
  • Earnest money deposit and explanation of who, what, when, where and how it is to be held and disposed of. 
  • How to deal with rents, taxes, bills
  • Any provisions as to home and pest inspections, how to proceed if problems are found and time frames for inspections/requests for repair/responses.
  • Contingencies- financing, sale of another home and inspection.  There are many other kinds of contingencies that can be inserted into the real estate contract.  All legal clauses should be checked out by an attorney. (Your REALTOR® should have clauses that have been attorney approved for most circumstances)
  • Time limit- when the offer will expire. 

Any offer can be withdrawn until the offer has been accepted without changes by both parties, with signatures in place.

If the seller does not accept ALL of the terms, he can reject the offer or make a counter offer.  ANY change in the original offer constitutes a counter offer and will require agreement and signature of the buyer to the changes.

Have your REALTOR® prepare a “Net Proceeds for Seller” when considering an offer so that you are clear about whom traditionally pays for what at the closing.  No one likes surprises at the closing! 

A word of advice~ Use what you know to make decisions, but acknowledge what you don’t know to make good decisions, and hire an expert to make the best decisions!


Dream On!

Dream ON…Image

We all have dreams when we reach adulthood, parenthood, retirement.  We want to have our own home, or a bigger home for our family, or even a smaller home after our family grows up and moves on.  Oh yeah, we’ve heard it a million times- it’s the American Dream! According to a study conducted by Fallon Research & Communications Inc., most Americans believe that home-ownership is important.  91 percent of owners and 72 percent of renters believe owning a home is  still a good financial investment.  The study also revealed that 68 percent of renters agree that people who own their homes experience a better quality of life due to more stable communities and greater pride in their neighborhoods.

How do we really know when it’s time to make those dreams a reality?  How can we be sure if we’re ready for it?  The people who are living the dream- how did they get there?  Just lucky?  Maybe- I’m a real believer in the old quote from the Roman philospher Seneca- “Luck (success) is when preparation meets opportunity”. 

The point is- Get Prepared!  If you are thinking that you might be ready to buy a home, the best first thing to do is find out where you stand.  Meet with a lender and find out: 

  • What is your credit score,
  • Based on your income, how much can you qualify for in a home loan,
  • What kind of special loan programs or buyer incentives are there to help you buy now. 

What happens if you ask these questions and find out that you’re not ready to buy a home right now?  Nothing bad- it’s all good, because now you know where your finances stand in the world of home loans, and you should have a good idea of what needs to happen to get you ready to buy down the road.  You may need to pay down some debt, you may need to increase your income by a certain amount, or you may need to be more diligent in making your current payments on time. Whatever the case- at least now you have a roadmap to your dream!

Opportunities abound in the real estate market right now!  Prices are competitive, interest rates are low, and the weather is nice!  Prepare yourself now, find a good REALTOR® ( and when the opportunity comes- you’ll be ready for it!

Dream on, dream on
Dream yourself a dream come true!

©Peggy R Smith

Old Kentucky Home Board of REALTORS® 


Be Prepared

I’m always trying to fill everyone in on what an opportune time it is to buy a home.  Sometimes you just can’t make the leap because the timing is not right in your life.  Maybe you just started your new job and need to get some time behind you, or maybe you think you might be moving to another town soon.  Short of location indecision, or joblessness- everyone should own a home or be making plans to own one!housing1

I’ve talked before about getting a folder and having all your vital papers together- just in case that chance comes along that tells you that you’re ready!  (“Success is where preparation and opportunity meet.” ~Bobby Unser) What goes into that folder?

Tax returns for the last 2 years.  Pay stubs from your job.  Bank and investment documents.  Canceled rent checks showing on time rent payments.  Divorce decree.   Any supporting documents if there have been adjustments or corrections to your credit report.

Did I say credit report?  I guess I should have started with that one!! Get a copy of your credit report.  You can get a free credit report by going to  There are three credit reporting agencies with reports on your credit.  Transunion, Equifax and Experian.   You will need to order each one of them to get a full picture of your credit.  Check for any negatives on the report.  Contact creditors if there are any mistakes.  Do this first, because sometimes it can take weeks to months to clear up problems and mistakes.  Save everything that explains the problem or clears up the mistake!

Once you reach that phase in life where you are paying your own living expenses- including rent, utilities, etc- you need to be constantly preparing for the next step- buying your own home.  This forward thinking can save you lots of headaches down the road.  One of the common problems that face young people when buying a home is the lack of credit history.  Always try to create a paper trail of regular payments that you made (on time).  Cell phone bills, cable bills, utility bills.  If you have a generous uncle who won’t buy you a car, but has agreed to give you an interest free loan- think about asking him to back you in getting that loan at a bank so that you can establish your own good credit history!  Always planning with these things in mind puts you in a position to act then the time is right

Another credit building tip- don’t apply for loans, credit cards or lines of credit that you’re not already pretty sure that you’ll be approved for, because numerous credit applications will bring down your credit score.  Remember that every time someone offers you a chance to apply for credit, and you think it can’t hurt to apply for it- you’re wrong.  Be very careful and deliberate about your credit planning.

Sit down now and think of everything that you might buy on credit over the next 2-3 years.  Home, car, furniture, vacation, work wardrobe, technology…  Now rate them according to priority 1-10.  Take that same list and rate them according to urgency 1-10.  Hopefully your home will be a high priority, but if it gets trumped by something of higher urgency- you’ll be able to plan for compromises that don’t involve creating debt BEFORE you buy your home.

I know that there are people out there who will say “I don’t want to buy a home!”  One of my favorite real estate sayings is this one- “If you pay rent- you’re buying a house, it’s just that you’re buying it for your landlord instead of yourself!!”  Let’s face it- the world just works out better for the prepared!  Be one of the prepared- start today!