The first thing that happens is that the buyer visits the property, to make sure that it is what they think it is and that they like it. Afterwards, they may want to do some "behind the scenes" investigation if they wish to further assure themselves that it meets their needs. Keep in mind, the longer this takes, the more likely it is that someone else will come by and decide to take the property. Most often, there is ample time for you, but no one can guarantee that.
Then, once it's been decided that you want the place, the buyer makes the owner an offer, telling the owner just how much they are willing to pay for their property. There is no rule whatsoever on how much this should be. This is an excellent example of how capitalism works. You make an offer, any offer you wish, and if the owner likes it, it is accepted. If the owner doesn't like it, they can either reject it or they can tell you what it is that they would take.
Sometimes, offers may be for MORE than the asking price. When this happens, there are usually multiple offers on a single place. In our market, I do not see this often; but I have sold places for up to $75000 above the asking price and will do so again from time to time. In some more expensive areas of the US, this can be the norm.
Usually, offers hinge on the price; money is always the big thing. But there are other factors I consider important. If, for instance, a buyer is buying for cash and is taking the place "as is", I often recommend that these offers receive extra consideration as the owner will not have to worry about any difficulties resulting from the buyer having to get a mortgage, an appraisal of the property coming up short, or problems with a home inspection. A quick and clean deal is worth something to both parties. Banks know this, any seller of multiple properties does. If a buyer feels they need any these various contingencies (another contingency might be for selling the home that they own now), by all means put these in the offer. But if you don't need those contingencies, recognize that your offer is stronger without them. I for one would willingly accept a lesser offer from someone who has the cash than from someone who would be mortgaged to the hilt. But that's me; owners don't always see it that way, nor do they always ask for or take my advice.
Keep in mind, an offer which too low can cause problems. I have one such deal now going on now: the owner accepted a low offer and only later on we discovered that he has liens on the property which were not revealed: in short, he cannot give the buyer clear title with only the money received from the sale. This, happily, is not normal. You also have to be aware that if your offer is too low, the owner could get offended and no longer want to deal with you. Part of my job is to try to avoid this situation. Things go much smoother during every part of the process if the buyer and seller get along. I have learned long ago, the hard way, that you can bargain too closely. Each of you needs the good will of the other and that's worth money to each of you.
Here's a typical deal: the buyer makes an offer. He doesn't really think the owner will take it, though he'd be delighted if they did. But, mostly, he wants to just "get the ball rolling", to get started and be ahead of anyone else who might also want it. As an agent, I might not write up a formal contract until we settle on most of the issues that divide the parties. Other times, I may decide it is best to get get it signed from the start and keep writing contracts until we are finished. If the offer is just way too low, the owner will probably just say, "Thanks for your interest, but I cannot accept that". In a closer offer, the owner may still reject it, but suggest a new price (lower than advertised) which he will accept. Perhaps the buyer will go along with this; perhaps we may have to repeat this series of back-and-forth until we reach an agreement. Every situation is different, no two are the same and the only guarantee that I can make is that there will be surprises along the way. But I will be here for you to work through them.
Anyway, we eventually get to the Purchase Contract, which is a formal written agreement between the two parties. In it, we try to think of every eventuality and spell out all the details of the sale. Both parties, buyer and seller, need to sign this before it becomes legally binding to either party. There may be a number of disclosures that are signed at this time as well - the Property Condition Disclosure, ones about lead paint, about agricultural districts, mineral rights, leases, who represents who… I try to keep these to a minimum when I can, to avoid confusing the issues or intimidating either party.
After it is signed (sometimes, before) attorneys for both parties may review the contract and, within a quick time frame, request modifications to suit their personal likes and concerns. There are times when these contracts are signed multiple times before every party and their attorneys are satisfied. Eventually, this ends and we proceed to the next steps. During this long series of steps, I will call the various third parties from time to time to check on the progress (and I want to them to know that I am watching them!), to assist in ironing out wrinkles and differences and to explain things when that might be needed. As the one party who knows all the negotiations and tries to understand each side, there are times when I can be very valuable to making the sale work. I might make 5 calls or I might make 50, depending upon the unexpected difficulties that arise or how smoothly things proceed. Officially, this is not my job, but I have found things go smoother and quicker if I do.
I’m getting ahead of myself. After the contract has been signed by everyone, if there is a mortgage contingency, we next turn it over to the banks. The mortgage contingency has a time limit to it. We need to give the banks time to do what they need to do to make sure they are willing to make the loan the buyer is requesting, but we don't want to give anyone time to dally and jerk around. During this phase, a lot will be happening between the buyer and his bank, but no one else has much to do. Lawyers are reluctant to do any of their work during this stage, feeling that until all contingencies are met or waived, they don't want to be running up the bill on their client and then find out there will be no sale anyway because the buyer can't get the money (or whatever).
Once there is a formal commitment by the bank to make the loan, then the attorneys begin to do their work. Of course, in a cash sale we skip all this about banks and go right to this point. The seller's attorney will get the abstract of title updated (the abstract is a long legal document which gives a history of ownership; they are not used in all States and sometimes not in NY). This goes out to an abstracting company and typically takes 3 weeks. But that depends upon how busy the abstracting company is and what pressures are brought to bear upon them. Once this is returned, the seller’s attorney then prepares the proposed deed, lien searches, and some other documents and sends them to the buyer's attorney who then examines them. Once the buyer's attorney is satisfied, we can then schedule the closing. But this stage can be more complicated and often is.
I feel this phase goes much quicker and smoother if there is one attorney involved or if the two attorneys have had a previous working relationship with each other. When they are from different areas of the State, things may run rougher too. But not necessarily, even more important are the personalities of each attorney. I like folks to use lawyers who are used to the real estate process, who are thorough, but are reasonable and even-tempered people. (You don't want your dog-fighting criminal attorney on the job here unless you want to hold up things and run up your costs!)
The closing is usually done in person, normally at the bank's office or the office of the seller's lawyer. However it may also be done by mail. Mail is a not a big deal to accomplish but it does take some extra planning. At the closing, buyer and seller, their attorneys, and sometimes their bankers and their attorneys, and I sit down around a very large table while large piles are papers are passed back and signed. You'll never sign your name more times in an hour than this! This is the point where you realize just how much work your attorney has been doing all this time.
When we are done, the deed will be filed, and ownership will have been transferred from the old owner to the new one. We are done. The seller has money. The buyer has a new property. And I get paid. And, unless we have earlier agreed otherwise, you can go to sleep tonight in your new home.