Make An Offer

 

After hours on the internet, miles in your Realtor's car, and more homes running through your head than you know what to do with, you've found your dream.  Time to make it your own.  But where to start?

Know What's Included

Go through the contract with your Real Estate Agent and make sure that you know exactly what you're getting.  Does the dishwasher stay or go?  Are built-in shelves left with the home?  What about air conditioners?  As silly as a few of these questions might sound, the majority of issues that put a closing to a halt revolve around seemingly miniscule issues regarding what's personal property the sellers will take and what stays with the home.

Determine Your Financing and Your Own Personal Limit

In this market, buyers need to get a pre-approval letter from their lender that states you will have the funds to meet the seller's price.  There is one thing a buyer should remember - the number given to you by the lender does not have to be the number you are comfortable at.  Know your budget, and remind yourself of the expenses you'll have in addition to the monthly payment, including utility bills, property taxes, etc.  Just because a bank will give you $300,000, it doesn't mean you won't find a perfect home that costs $250,000.

Examine the Home Carefully

Before making an offer, estimate major improvements or renovations the home will need to undergo.  Check for more serious issues, such as moisture in basements or turned-up edges in wood flooring.  Discuss with your Agent possible issues the seller might fix before closing, or decide to do the repairs yourself.

Make A First Offer

Contrary to what most homebuyers believe, the first offer is not only determined by the dollar amount you would like to pay, but also by comparing listing prices and final sales prices of other comperable homes in the area.  Buyers should typically offer 5%-10% below the list price to show their serious inclination to purchase. Do not make an extremely low offer unless you are prepared for outright rejection.

Decide on Earnest Money

Some sellers determine a buyer's ability to back up their offer by their Earnest Money Deposit.  The cash you have included with your offer shows good faith.  The earnest money should gover about 1%-2% of the purchase price, and will be used later toward your downpayment.

Consider Contingencies

A contingency is a condition that the purchase offer will only go through if certain issues or demands are met.  Common contingencies are that the home must pass a professional home inspection, or the buyer's current home must first be sold before they can purchase the one in question.

Be Patient

After the first offer, most buyers can expect a counteroffer.  Counteroffers will go back and forth between buyer and seller until both parties agree upon a deal that satisfies their needs.  Be patient!  If you are over-anxious, you run the risk of showing the sellers that you'll be willing to go higher than your offer.

All of the items above should be discussed with your agent.  He or she should know how to handle all of these situations to make sure you're getting the best deal out there.

So buckle up and enjoy the ride!  In the end, it could land you your dream home.