You’ve whittled down your wish list, toured several homes and finally found the perfect fit. Now it’s time to take the leap and make an offer! This can be both incredibly intimidating and extremely exciting. So how can you throw your hat into the ring with confidence? Here’s what you need to know to make an offer like a boss!
Utilize your agent’s experience when determining your offer price
Work with your agent to determine if the seller’s listing price is fair based on similar home sales in the area, interest in the home, time on the market, and more. Then, figure out the max offer price you are willing to reach that isn’t too financially taxing and settle on what your starting offer price will be.
So, how do you decide how much to offer on a home you like? That’s a tough one to answer because it depends on a lot of factors:
• Are there other offers coming in?
• How long has the home been on the market?
• What is the owner’s situation?
• What terms (besides money) can you offer the seller?
• What is the overall market like?
Those are just a few of the factors you should consider. But regardless of these factors, your agent should also look at the sales data in the MLS to determine how much the home is truly worth by looking at how much other similar homes have recently sold for.
Ultimately, it’s your choice how much you want to offer initially and how much you’re willing to go up to in order to get the home. Market value is essentially driven by what a ready, willing, and able buyer is willing to pay for a home. But it’s also dependent upon how much a ready, willing, and able seller is willing to accept.
Your agent will do everything they can to help you understand the market and value of the homes you’re considering. They’ll give you their perspective and advice as your agent, which should put you in good position to get a home for as low as possible, while still submitting an offer a seller will consider and hopefully accept (Coming in with too low of an offer, at least without justification, can hurt your chances of getting a home at all, let alone at a good price).
Carefully select your contingencies and pick your desired closing date
Any home sale generally comes with a set of contingencies that must be met before it can be completed. These can include inspections, repairs, appraisals, and more. These need to be selected carefully, as an offer with too many may be less appealing to the seller.
When you submit an offer, you must also present a date to settle, usually about 60 days after the purchase agreement is signed. You want to give yourself enough time to meet your end of the contingencies, secure mortgage approval, finalize loan details, and more. If you are the responsible party for a delay, you may have to compensate the seller.
It’s not necessarily all about the money
A great offer isn’t just about how much you offer. Although that certainly matters, it’s also about other terms you can offer. Here are some typical terms and conditions sellers may be interested in:
- Are you flexible on your closing date? (They may want time to look for another home, for instance.)
- How much of a down payment do you have?
- Are you paying cash? (This is less risk and less time for sellers to wait.)
- Will you waive contingencies, like for a home inspection? (Not usually advisable, but it can be useful under the right circumstances.)
Again, those are just a few. But those are also not things every buyer can accommodate.
Have everything in order
- Make sure all the contracts are filled out thoroughly and properly.
- Have your pre-approval ready and attached with the offer, ideally from a reputable lender that no agent or owner will question.
- You may be going up against other offers or the seller may negotiate, so it’s best to prepare ahead of time for a counteroffer. But this isn’t anything to stress about. Talk through the best strategies with your agent.
- Be ready and responsive during negotiations. Too often, buyers take too long responding, which can create a bad tone. That sort of stuff you can control, and should control.
Organization and responsibility of the buyer and buyer’s agent can make a big difference in a seller accepting an offer, especially when it comes to situations where there are multiple offers presented. So, when it comes time to make an offer, make sure you put your best foot forward in every way possible – not just the amount you’re offering. It can truly pay off in the end.