Buying a House Series #6 – Making an Offer On the Home You Want

So you fixed your credit score, saved enough for a down payment, know what you can afford, selected a real estate agent, and found a home you like… now you need to make an offer! Looking for a home is sort of fun but making an offer can be tough. There are many things to consider and the process could be quick or painfully slow. It’s easy to get get frustrated or lose you patience. This “Buying a House Series” is made with years of experience on the best way to get your ducks in a row so you can get a loan and find the home you want at the price you want. Use the following the tips below to make the process much smoother on you…

Discover the Right Price For the Home You Want

The listing price is just a number and it doesn’t mean the house is worth what the buyer is asking. The current housing market, location, and housing inventory will affect the price. The amount of time the property has been on the market can affect the price also. Your best bet is to always look at what the other similar houses are selling for near the house you want. These are referred to as “comps.”

Lean On the Experience of Your Real Estate Agent

A good real estate agent will know how to determine a fair asking price. Ask them to tell you about the current real estate market in the area you are choosing and have them walk through the the comps with you. You want to get a good deal but not insult the buyer. You need to walk a fine line. Conventional wisdom is that it’s unrealistic to go more than 5% below the asking price unless the house has been languishing on the market for an extended period of time.

Beware the Lowball Offer

Yes sometimes a house is priced too high and has been on the market for 6 months but the “low ball” offer should be used rarely and with great care. If the owners have lived in the house for a long time then they have great pride in the home in most situations. In the end a good deal is when both parties feel like they got a fair deal. You just have to weigh the options. Will a couple of thousand dollars that will have a very small effect on your monthly payment be worth potentially losing the chance the buy the home?

Write a Letter to Separate Yourself From the Potential Buyers

If the sellers have multiple people interested in the house then write a letter to stand out. This has proven to be a good strategy. Tell them your plans and why you want the house. Speak from the heart but keep it as professional as possible. Keep your eyes and ears open when touring the house to mention things important to the sellers. Are they family oriented? Do you have a family or do you plan on building one in the home? Do you see that they have pets? Do you have pets and will they enjoy the home? Look for vacation pictures and sports team clues to help humanize your letter.

Consider Your Contingencies Wisely

In a competitive market, your contingencies can make or break the offer. Do you need to sell your home first? Maybe you can forgo and inspection even though that can be very risky. It’s best to make an offer with the least amount of contingencies possible. Again, lean on your real estate agent about contingencies.

Check Your Emotions at the Door

Don’t fall in love with the house and keep your options open. If you get to attached to the purchase you could pay too much or set yourself up for potential problems later. Put together a good offer with your real estate agent, submit it, and be fine with whatever the outcome may be. There are always other houses just as nice or nicer that you can find with a little more work.

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