May 21st, 2015 10:08 AM by Jackie A. Graves, President
You're ready to make an offer on the home of
your dreams. But before you do, make sure you're really ready. Ask yourself and
your household members if this is the home for the next five or so years. Make
sure everyone is on board with commitments to make it work, from putting off
the dream vacation to putting in the elbow grease to clean, paint and do the
Have your real estate agent pull up the most
comparables (CMA) within a reasonable
radius of the home, so you can compare the home with other similar homes in
terms of location, size, features, and amenities.
Next, consider the most current market
conditions, so you can choose the right offer strategy.
a buyer's market, discounts are common because there are fewer buyers, more
properties for sale, and home prices are soft or falling so offers under list
price are common.
a seller's market, homes sell quickly for full price or higher because there
are plenty of buyers and few homes for sale.
Whether you are in a buyer's market or a
seller's market, your goal is to buy the home at a fair price. If you were the
seller, what is the lowest possible price you'd accept?
To show the seller you're serious, include a
copy of your lender's pre-approval letter, along with a cover letter
summarizing your strengths as a buyer in terms of creditworthiness, flexibility
in closing, and why you love this home. Include a copy of the comparables you
used to show why your offer is a fair price for the property.
If the seller's home is offered at a
reasonable price, don't waste time. Pay asking price or close to it. A home
priced to sell will sell quickly and you'll lose it if you mess around.
Offering too little for a property is risky.
If the seller feels insulted by your offer, you've lost the opportunity to
negotiate. On the other hand, some sellers are simply unrealistic about their
home's value. Maybe your offer will be their wake-up call. The seller will
probably respond with a face-saving still-high offer, but at least they're
negotiating with you.
If your offer is conditional, such as your
need to sell another home before closing on the seller's, you'll have to find a
way to sweeten the deal, such as a full-price offer. Few sellers will accept a
discount and a contingency.
Your real estate professional will help you
draft the offer with a price, estimated closing date and terms, including
earnest money (a guarantee that you'll perform as a buyer in good faith,) final
approval by your lender and your right to have an inspection. Your earnest
money check will be forwarded to the escrow agent when your offer is accepted.
You'll have a brief period to get your home
inspections completed. Your home inspector will go through the home with you
and point out the condition and potential lifespan of all systems and
appliances. You should only renegotiate when a problem wasn't obvious before,
or when a system is found to be unsafe or not functioning.
Once you and the seller have agreed to terms,
your offer is now a binding contract and you're on your way to owning a home!
Written by Blanche Evans | To view the original article click here