Making An Offer To Buy A Home
So you have found your dream home? Congratulations! Choosing a home can be a very difficult process, and making that decision puts you that much further in the process to home-ownership! Now it’s time for you to make an offer on your dream home, but it’s not as simple as throwing a dollar amount at the seller and hoping they accept it.
There are many do’s and don’ts that every potential buyer should know, so we have included many of them here to help you reach your home buying goals!
Speak With Your Realtor
To come up with a reasonable price, you will need to team up with your realtor. Because Team Vivi’s agents are well-versed in the local neighborhoods, they will be the difference between making a poor offer and making a great one! They will check things such as other home sales in the area, how long the owner’s have owned the home, and how much the home has sold for in the past. All of these are very important factors in making an effective offer!
Unless you’re offering to pay cash for your dream property, you will need to take out a mortgage. The first step in this process is getting pre-approved. Getting pre-approved on a mortgage shows what a lender is willing to lend you under specific terms and conditions. This is a huge step in making an offer!
Already having a pre-approval for a mortgage before making an offer on a home greatly increases your chances of having your offer accepted.
Buyers will generally take offers with a pre-approval backing far more seriously than those without. The pre-approval shows the seller that your offer is real, that you can afford it, and that there is a smaller risk of your financing taking a flop.
Make an Offer
After you have gotten pre-approved and identified the home you’d like to purchase, it’s time to make an offer. This is the time when you and your agent must work side by side to come up with not just a reasonable offer, but an offer that limits any risk for the sellers. The less risk the sellers have in an offer, the more likely they are to sell!
Work with your agent to come up with an offer that takes into consideration the seller’s motivation and situation, as well as the prices other homes have sold for in the area. An initial offer that is too low may offend sellers that are emotionally invested in the home. Remember, you’re potentially purchasing property that the sellers have made memories in! An initial offer that is too high could lead you to spend more than you actually need to for the property.
Avoid as many contingencies as possible in your offer: Sellers like to leave little to chance, so the fewer contingencies you put in your offer, the better. Try and stick to large contingencies such as those reliant on a mortgage approval and a home inspection. Keeping contingencies simple and less numerous will make sellers more comfortable and less likely to push your offer to the side.
Remain unemotional: Remember, purchasing a home is a business transaction. While it is easier said than done, you must remain in that mindset. Any emotional reactions you may have create the potential of spending more money for your home!
Don’t let competition change your plan: Homes in competitive markets will often draw multiple offers, but don’t let this change your original plan. Stick to what you can afford and what you are pre-approved for, as well as what you originally planned to offer. Never agree to extra concessions asked by the sellers just because there are multiple offers, unless they make sense and fit with your original offer.
Never agree to forgo a home inspection. Ever. This will never work out in your best interest when purchasing a home. It may allow for an offer to be accepted, but puts an enormous risk on the buyer!
You don’t need to “win” the house at all costs: Becoming emotionally attached to a home during the offer process can lead to buyers doing whatever they can to get their offer accepted. This rarely works out for the buyers! Accepting all concessions asked by the sellers just to ensure the offer remains at the head of the pack is a very dangerous decision that very rarely works out in the buyer’s favor.
Ideally, your offer will be one that not only works for you, but also makes the sellers happy and reassured that the closing process will go smoothly. Don’t be afraid to negotiate! While the sellers have every right to not accept an offer for any reason, the same goes for the buyer. Come up with an offer that is mutually beneficial; don’t sacrifice your well-being just to push your offer through!
It is important to remember that this process takes time. It is not unusual for the seller and buyer to negotiate more than once on a home. While you may just want it to all be over with, trying to streamline the process can end up costing you time and money!
Just stay calm, take your time, and most importantly: stay positive and friendly! You may be surprised how much smoother the process goes when you build a good personal rapport with the seller!
We hope that this guide will prove very useful for you when considering making an offer to purchase a home. If you have any questions about making an offer that we did not cover, or would just like to chat about your home buying goals, give us a call at 303.847.1868 or schedule your free home buying consultation online!