Tips for Making an Offer on a Home
Finding the right home for your family can be a stressful task, so here are some tips for making an offer on a home.
1. Know How Offers Function
As a buyer you should have a basic understanding on how offers on real estate function, so you can be highly involved and competitive in the offer process. Your real estate agent will convey your offer(s) to the seller’s agent and if your offer is accepted by the seller then your offer becomes the purchase price of the property. The seller could also counter offer with a different sales price, which you could accept or continue with a new offer. Eventually, you will either come to a figure that both you and the seller will agree upon as the purchase price or you will not agree.
2. Review your Finances and Set a Budget
Making a great competitive offer will be worthless if your offer is beyond what you can afford to pay. View homes that are within your price range and the price range should include the monthly mortgage payment, of course, but also the cost of insurance, taxes, maintenance and any HOA fees. Make sure you are only making offers on homes you can afford.
3. Apply For and Obtain Preapproval for a Mortgage
A seller will not take your offer seriously, no matter how competitive it is, if you don’t have the money to back it up, so the importance of having mortgage approvals is paramount if you want to be considered a serious buyer.
4. Hire the Right Agent
A competitive offer requires an agent that knows both your circumstances and the real estate market where you are looking to buy a home. If you are moving out of your current local area, it would be wise to hire an agent who works in and knows the real estate market of where you are looking to move. Most importantly, the agent you hire must be able to negotiate and that doesn’t mean just deliver monetary offers. A truly great agent must know how to use factors other than the house itself, like the interest rates, available inventory, location to schools, grocery stores or other necessities of family life, in order to make truly competitive offers. The right agent can give you the right tips for making an offer on a home.
5. Be Creative with Your Offers
Think about things that would allow you to make a lower cash offer in exchange for items like, offering rent-back, or not having the purchase contingent upon the sale of your current home.
6. Be Ready to Relocate
It’s okay to browse for real estate to educate yourself but don’t make any offers unless you are really ready to buy, including being preapproved for a mortgage, and are ready to move quickly so you don’t miss the opportunity to buy your family’s dream home.
7. Be Sure To Do Your Research on the House
If the house you are looking to buy has been on the market for an extended period of time, find out why. If it’s an older house, do some investigation into if any building permits were issued on it for repair work. Hiring a home inspection company is always an option. Make sure there are inspections of the roof and for termites as those can be expensive problems.
8. Determine What is a Fair Purchase Price
Is the house overpriced or is it a deal? What if the price you are willing to pay is the list price or near it? Be fair to the seller and make an offer that has the best chance of being accepted, so you don’t miss out on buying your family’s dream home.
9. Determine What the Seller Really Wants
It may seem that a person selling a home is always looking for the highest price. That is not necessarily true as some sellers are looking to sell quickly, due to divorce or job relocation, even if it’s for less then what the seller paid for the house. Try to determine the seller’s motivation for selling the house and if there are any ways you can make your offer more competitive based upon these motivations, without having to necessarily increase the purchase price.
10. Finally, Leave Your Emotions Out of the Process
In a situation where you really love and want the house, you still do not want to overpay for it and that is what usually happens when you think emotionally. Remember that buying a house is the single largest financial commitment by most people and that it’s a commitment that could last from several years to several decades, so remember your budget.
If you are looking to buy a new home, contact Ferrer Law Group for tips on making an offer to buy a home. Call today!
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