September 12th, 2019 6:14 AM by Jackie A. Graves, President
how much to offer on a home — quite possibly the most valuable item you’ll ever
own — is a little like Goldilocks’ experience with the fairy tale bears. You
don’t want to make an offer that’s too big or too small. Instead, to have the
best chance of reaching a deal, you need to make an offer that’s just right.
Tips for making an offer on a house
you’ve decided to buy a home and found one that you love,
it’s time to get down to business. Writing an offer that gets a seller’s
attention is about standing out from other buyers. Here are five quick tips for
making an offer on a house:
Work with your real estate agent to
evaluate comparable listings in the area to determine the right amount to
offer. A good rule of thumb is that the more competitive the market, the closer to
asking price you should be.
Write a personal letter detailing
why you want the home.
Wait for a response from the seller.
If the offer is accepted, you’re
ready to move on to the other steps in the home-buying process (finalize
financing, get a home inspection, etc.).
If the seller declines or
counteroffers and you still want to buy the home, come up with a more
attractive offer and resubmit.
Making an offer under asking price
my clients to make an offer they feel good about, and that can sometimes mean
offering under asking price,” explains Casey Moynihan, a
Realtor and broker based in Nashville, Tennessee. “In situations when my buyer
is questioning the value, we look at a few things, including days on the
market, if the house is currently occupied, neighborhood comps and if there are
multiple offers on the property.”
less than asking price can be a risk, but if you determine you’re willing to
chance it, it may be better to offer a price that you feel good about.
How to back out of an offer
start having second thoughts about a home and want to
back out, keep in mind that there are different versions of real estate
contracts, which can vary even within a single state.
real estate offers are binding once the seller accepts, signs and the contract
is fully executed,” says Hillary Hertzberg of The Jills Zeder Group at Coldwell
Banker Residential Real Estate of South Florida. “We draft offers with
inspection periods which allow for due diligence and the buyer may have options
to potentially cancel the contract depending on the terms.” A buyer should
speak to a lawyer for situation-specific clarity on contract questions.
rule of thumb is that once earnest money has been exchanged, you
risk losing that deposit if you back out. “There are a few opportunities during
the buying process when a contract can terminate and the buyer is not
penalized,” Moynihan says. “(This could include) if you have an inspection
contingency and something comes up in the inspection that can’t be resolved
between buyers and sellers, if you have an appraisal contingency and the
appraisal comes back short on the home’s value, or if you have a financing
contingency and the bank can’t get your loan approved.”
Advantages of writing a personal letter
can be emotional about moving away from a home they love, so writing a personal
letter can offer a glimpse into why you want their home — and what you love
residential transaction almost always has an emotional component,” Hertzberg
says. “The seller originally bought the home as there was something they loved
about it. A personal letter from the buyer can set one buyer apart from a pile
of impersonal offers. In a competitive market, this can make all the
difference. A handwritten note has incredible power in the digital world we
live in today.”
Avoid common deal breakers
want the best shot at scoring your dream home, it’s wise to know what pitfalls
to avoid. Common deal-breakers can include too many
contingencies, asking for personal property, demanding a really fast closing
date, and other potential turn-offs to sellers. Talk with your real estate
agent to craft an offer that shows you’re willing to compromise rather than
Can I make an offer without a real estate agent?
line: you don’t need to work with a real estate agent to buy a home. You can
write your own offer and submit it to the seller (if it’s for sale by owner) or
to the seller’s agent. However, going it alone without the help of a savvy
agent (especially if this is your first time buying a home) may not be the best
critical to work with an agent that not only has market expertise but also has
deal negotiation expertise,” Hertzberg says. “The value of the agent’s
negotiation skills is paramount. The savings or loss can be very significant.”
Moynihan adds, “Real estate is an emotional process, so it’s my job to make
sure my clients are protected and educated throughout the process.”
agent who can calmly explain every step of the process can give the buyer peace
of mind — a benefit that’s hard to quantify monetarily.
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