You have set your budget and looked at houses to buy. Now you are ready to find the home you love. How do you actually make an offer on your dream home? Here are 3 things to consider.
How Much To Offer:
While it is important to stay within your budget, there are more factors that go into getting the house of your dreams than simply picking a number. These are some factors to consider when deciding on how much to offer.
- Is there a similar home for sale in the same area? You can gauge how much competition you’re facing by examining how long they have been on the market. Your offer should be stronger if there is more competition.
- What length of time has the house been on market? The seller might be more open to accepting an offer lower than the asking price if it has been on the market for a longer time (more than two or three months), or if it has been listed multiple times
- Are you prepared to compete with other buyers? There’s always a possibility that you might be able to enter a bidding battle if the house is located in a highly desirable area. Before you make an offer, you need to determine how high you are willing to go. It might be a good idea to make your strongest offer first if you anticipate other bids on the house.
- Do you need to make repairs or do renovations? These future costs will help you keep within your budget.
What Should You Include in Your Offer?
Your agent can help you contact the seller to submit a written offer. While your agent may write the actual offer letter, here are some details of what should be included:
- The address of your home
- Your name and the names of any other person who will be buying the house together with you, such as your spouse
- The value of your offer
- All contingencies that you request (i.e. conditions that must be met before the deal is finalized), such as a home inspection.
- You can request any seller concessions (i.e. things you want from the seller), like cash towards closing costs.
- You can include items you would like in the sale, such as window treatments and appliances.
- The amount of your earnest money deposit
- So the seller knows you won’t have any problems financing, it is important to send your approval letter
- The closing date
- The date that you would like to move into the house
- Deadline for responding to your offer
How to Negotiate the Purchase Price
If the seller accepts your initial offer, then great! You just bought a house! The lender will send you a Loan Estimate detailing the costs and fees of the loan. However, these numbers may change by up to 10% before closing the loan. Your lender will send you a Closing Disclosure containing all final numbers before you close the loan. This allows you to see exactly what you are paying.
You can decide how to proceed if the seller rejects or counters your offer. You or your real estate agent can contact the sellers to find out if they are willing to negotiate. In this case, you might trade counteroffers to reduce the purchase price or negotiate other parts of your offer, like the date you intend to move in at.
Negotiating can be stressful. It’s important that you keep your goals in sight. It’s okay to let go if the seller and you are not on the same page. There will always be another home. You should consider the long-term when making this long-term investment.
You can decide how to proceed if the seller rejects or counters your offer. You or your real estate agent can contact the sellers to find out if they are willing to negotiate. In this case, you might trade counteroffers to reduce the purchase price or negotiate other parts of your offer, like the date you intend to move in at.
Negotiating can be stressful. It’s important that you keep your goals in sight. It’s okay to let go if the seller and you are not on the same page. There will always be another home. You should consider the long-term when making this long-term investment.