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Making an Offer

Finding the right house is a pretty exciting experience. The house feels like a home when you walk in – the rooms are the right size, the floor plan suits you, the location is exactly where you want to be, and you can’t wait to move in!

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So you tell your real estate professional, “Wayne and Jean, this is the one! We want to make an offer!”

You want to ensure that your offer appeals to the sellers:

1. Price. Your REALTORS will help you determine the appropriate sale price for the home. You might be offering close to the list price or you might be a little below. If you’re below list, you’re going to want to provide the comps that you used to determine that the price you’re offering is fair.

2. Terms. Factors in your offer other than the price can impact how it is received by the seller. For example, a close date that is soon or far in the distance might appeal more.

3. Financing. The type of mortgage that you’re securing will also make a difference – some mortgages are quicker to approve and are more likely to approve. You want to provide your pre-approval letter and all documentation to help the sellers view you as a serious buyer.

4. Earnest money. The amount of downpayment that you’re providing might also help the sellers make a decision. If you’re putting down a lot of money, they’ll know that you really are ready, willing, and able to buy the house.

5. Conditions. If you have any contingencies – you need to sell your current home, for example – that may impact the seller’s decision to accept your offer. Some buyers request that the seller pay some or all of the closing costs – that might only appeal to the seller if your offer is strong.  You will want to make your offer contingent upon an inspection and the seller may specify limits to this.

Once you’ve written the offer, your REALTORS may do two more things to strengthen your position, particularly in a home that may have multiple offers.

6. Write a personal letter. When you make an offer to buy a home, you’re essentially entering into a financial agreement with another person. But buying and selling a home is an emotional process as well, and there are times when we’ve asked our buyers to write a personal letter to the seller. This letter can be as short as one or two pages and usually appeals to the seller’s sense of pride in the home. The buyers will describe their family and what their plans are for the home once they move in. Point out the things in the home that you lvoe.

7. Present the offer in person. Some sellers will allow the REALTOR to present an offer in person. This gives us the opportunity to share some personal information about you with the sellers and hopefully persuade them that your offer is not only legitimate but that you will care for the home with the same love that they did. Your agent can also begin negotiations at this point and you might have a signed contract!

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When you find the right home, entrust your offer in the hands of a REALTOR who understands that buying a home is both a financial decision as well as an emotional decision!

 

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Writing an Offer on a Home

Once you’ve found a home, your agent will help you write an offer.

An offer takes the form of a contract and specifies everything about the conveyance of the property. Then, your agent will present the offer to the listing agent who will present it to the owners.

How Much Should You Offer?

In writing an offer, some buyers are concerned about offering too much. They think that if their offer is accepted, that means they could have offered less and still gotten the house. Other buyers are concerned about making an offer that is too low. They’re afraid that the sellers will be insulted and will refuse to negotiate.

Our advice to you is to make an offer that reflects what the property is worth. The only way to find out what it’s worth is to compare it to other similar properties that have sold in the same neighborhood. Your Realtor will call that a Comparative Market Analysis (CMA). For more information on how CMAs are written, please read this article.yellow

What Other Information is in the Offer?

In addition to how much money you’re willing to offer for the home, there are other factorsthat are included in your offer and may impact the seller. One factor is the time frame. Your seller might want to close quickly or slowly to accommodate some event so your offer might be more appealing if you’re offering a flexible closing date. The type of financing you’re securing and the amount of your down payment are also important to your seller. They may feel more secure if your down payment is large or if your loan is a certain type.

You will also be asked to provide a check as earnest money. This is money, usually $1000, that indicates that you really intend to follow through with this contract as it is written if it is accepted by the seller. Of course, if the contract fails to be accepted, you will be refunded that money. If the sale gets to closing, this money will count as part of your down payment.

Then What?

Your agent will present the offer to the sellers. Possibly, they’ll have you write a letter telling the sellers a little about yourself to make the offer more personal. Additionally, your agent may present the offer in person to negotiate on the spot, with your permission.

The seller will either accept the offer as written, make a counter offer, or simply say no. If they accept the offer as written, congratulations! You’re on your way to owning the home you’ve chosen! If they make a counter offer, then your agent will negotiate on your behalf to try to reach a meeting of the minds. If they say no, then you’re back to the drawing board.

 

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