Once you find a house you want to buy, you and your agent, if you are using one, will write a purchase agreement to present to the seller or the seller's agent. The purchase agreement lets the seller know how much you are offering to pay for their home, and whether you are placing any conditions on the offer. Before you sign a purchase agreement, keep the following in mind:

• Decide if you want legal representation. The use of an attorney to help you with the homebuying process varies from one region of the country to the next. If you decide to use an attorney to represent you, be sure you retain one who specializes in residential real estate transactions in your area.
• Know what happens to your earnest money. When you submit a purchase agreement, you will generally be required to pay an "earnest money" deposit. The earnest money deposit shows that you're serious about buying the home because, in some cases, if the seller accepts your offer and you fail to purchase the house, the seller may have the right to keep this deposit. This deposit is held by a third party such as your agent, title company or escrow agent until the sale is closed or contract is broken. If you buy the house, it is applied to the down payment or closing costs.
• Require the seller to do a title search. The title should show no substantial claims or liens against the property. The type of proof varies by area, and your agent can tell you what kind is used where you live. In addition, you may be required to obtain title insurance by your lender. Title insurers offer varying types of coverage and you should decide what type of coverage is best for you.
• Decide what type of deed you want. You'll most likely specify that the seller convey the property to you with a general warranty deed that transfers ownership rights (or title) to you.
• Decide what conditions (also known as contingencies) you want to place on buying the house. Your purchase may be made contingent on obtaining financing, a building inspector's satisfactory report or selling your present home. Real estate contracts today already include many of these standard real estate contingencies.
• Spell out what you're buying in the contract. Other than the house, the purchase agreement can specify which items in the house you want to include in your offer. Common items to be specified may include appliances, light fixtures, shades and drapes, storm windows, and flowers, shrubs and trees.
• Determine what special provisions should be included, such as for property taxes, insurance costs and utility bills. Read all the small print carefully.
• Determine the closing date and possession date. Your agent can tell you who typically acts as a settlement agent in your area. Allow yourself plenty of time for financing and all the paperwork in the transaction.

The Seller's Response

Your real estate agent will take the offer to the seller or seller's agent. The seller will either accept, reject or counter your offer with changes in some of the terms. For example, the seller may make a counteroffer asking you to increase your offering price. You may either sign the purchase agreement, thereby agreeing to buy the house on the sellers revised terms, or counteroffer at this point.

• Negotiating Counteroffers. Your real estate agent will negotiate the often emotional, sometimes maddening details of offers and counteroffers. These may include whether the buyer or seller pays points, who pays for any repairs to the property, or which furnishings the buyer wants to keep, such as the rec room pool table. During this phase, a real estate agent can be a steadying, objective presence, helping both buyer and seller look beyond the emotions that often drive negotiating tactics.
• Withdrawing an offer. In many cases, you can withdraw your offer up to the point when it is accepted. If you do wish to cancel the offer, it may a good idea to consult with a real estate lawyer. You don't want to lose your deposit, or be sued for damages perceived by the seller. However, although it may be possible to withdraw your offer, you should make an offer only when you are committed to purchasing the property and not assume that you will be able to cancel your offer if you change your mind.
• Coming to terms. When you both agree to the terms, you will then sign a purchase agreement, which becomes a valid contract. (In some states, a binder agreement is required before the final contract is drafted; ask your real estate agent if this applies to you.) Only when an offer is accepted and signed by both parties is the contract binding.