This is the fourth part of our series on buying a new home in the Vail Valley. In our last installment, we discussed the importance of being preapproved for your mortgage. This week, we will look at what happens once you have found a home you would like to buy and decide to make an offer.
The first step is to determine how much you are willing to offer for the home. It is important to remember that the more competition there is for a particular home, the higher the offer should be. In some cases, it might make sense to put in an offer that exceeds the asking price. Be realistic when presenting an offer – only make an offer you actually want – and can afford – the other party to sign.
To communicate your interest in purchasing a home, we will present the listing agent with a written offer. The decision to accept or reject your offer rests with the seller, who may accept, reject or counter your offer. At this time we will negotiate the terms of the contract, if necessary.
After terms are agreed upon by both parties, and an offer (or a counter-offer) is accepted by both parties, we “go under contract.” We use this phrase because once both parties have agreed and signed, the offer or counter offer becomes a legal contract. When your offer is accepted, you should be prepared to make an “earnest money” deposit. Earnest money is held by the title company as a guarantee of your intention to purchase the property.
The step-by-step contract procedure for most home purchases is standard. The purchase agreement used is a standard document approved by The Colorado Real Estate Commission. The Rocky Mountain Home Team will review that agreement with you when you are ready to make an offer to ensure you understand the terms and what will be expected.
The length of time spent between going under contract and moving into your new home will depend on the specific situation, and can thus vary from weeks to months. For a standard transaction, however, you can expect to be under contract for five weeks. We’ll outline what those five weeks will look like in our next installment.