Buying a home: step five

5. Make an offer.

When searching for your dream home, you were just that - a dreamer. Now that you're writing an offer, you need to be a businessperson. You need to approach this process with a cool head and a realistic perspective o your market. The three basic components of an offer are price, terms, and contingencies (or "conditions" in Canada).

Price - the right price to offer must fairly reflect the true market value o fthe home you want to buy. Your agent's market research will guide this decision.

Terms - the other financial and timing factors that will be included in the offer.

Terms fall under six basic categories in a real estate offer:

1. Schedule - a schedule of events that has to happen before closing.
2. Conveyances - the items that stay with the house when the sellers leave.
3. Commission - the real estate commission or fee, for both the agent who works with the seller and the agents who works with the buyer.
4. Closing costs - it's standard for buyers to pay their closing costs, but if you want to roll the costs into the loan, you need to write that into the contract.
5. Home warranty - this covers repairs or replacement of appliances and major systems. You may ask the seller to pay for this.
6. Earnest money - this protects the sellers from the possibility of your unexpectedly pulling of the deal and makes a statement about the seriousness of your offer.