If you are planning to buy a home in the near future, you will want to have your ‘ducks in a row’, so that you are ready to proceed and make an offer when you find the right home. Multiple offers are not uncommon. Here are some tips that will help you get the home you want:
1.) Your finances need to be in order before you start looking for your new home, this way you are prepared and ready to make an offer, when you find the home you like. If you are planning to obtain a mortgage, make sure you get a pre-approval letter from your lender to accompany your offer. Click here for good information on getting pre-approved.
2.) Selecting good agents with knowledge of the current market conditions and negotiation experience are an essential part of helping buyers through the process. This may be the largest purchase that you’ll ever make, so you’ll want to be selective and do your research.
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3.) If you start your home search prepared and with an open mind, you’ll be a step ahead, especially during “hot” market conditions, when properties are selling very quickly. Keep in mind, there are a lot of things about a house that can be easily changed such as paint, appliances, counter tops and flooring.
4.) Be prepared to move fast when you find the home you really like. If you’re in a competitive market, you may really want to make your first offer your best offer, assuming you are potentially up against other offers, or you might miss out otherwise. Time is of the essence, even while an offer is being negotiated, another offer could come in and cut in. Once buyer and seller are in full agreement in writing, an offer is considered “accepted”.
5.) Do the math and weigh things out, if you are in negotiations of the sale price. You’ll want to consider what your monthly payment based on an estimated sale price would be. You’ll also want to consider if a difference in sale price would be worth losing the right home over, when your monthly payment amount might only change by very little in the overall.
6.) Base your offer on the home value, not just the list price. The recent sales activity in the neighborhood and area market gives you and your agent the needed information. If a home is priced at or below market value, you are likely not going to be able to get it for less. If it is priced above market value and has been on the market for a while, a lower offer may get you the home. Ask your agent for a Comparative Market Analysis (CMA). Keep in mind, every sellers’ motivation and circumstance is different. Some sellers are very motivated, some sellers don’t mind waiting and keeping their home on the market for extended time periods, as they are just not in a hurry and their asking price may be more important to them, than a quick sale. Also, be careful not to to insult a seller with a ‘low-ball’ offer, this may offend him/her, you may not even get a response at all. While agents are required to present all offers promptly, sellers do not have to respond to an offer. This is where a good agent will be invaluable in guiding you how to best proceed with a good strategy.
Keep in mind: If you are planning on obtaining a mortgage, the sale price of a home will need to meet the appraisal value, otherwise an offer may fall subject to renegotiation of the sale price. If the parties can’t come together on a new price, financing may not be possible and the transaction may fall apart.
7.) You can ask questions, of course, the more you know about what is important to a seller, the more you and your agent can do to make your offer as strong as possible. Does the seller already have a new place and want a quick closing? Does the seller not have a new place and therefore would prefer a longer time period to closing, possession and/or even a rent-back agreement? The more you know, the better strategy you and your agent can put together to make things work best for both parties. Ask your agent to find out as much information as possible. Keep in mind though, the seller’s agent is only allowed to share such information details with permission from the sellers. One can ask, but that does not mean one will get the information, if the seller does not wish to share any personal information details.
Remember that your offered terms could even be more important than price. In a hot market, this could mean making higher earnest money deposit (EMD) to have ‘more skin in the game’, showing that you are very serious, flexibility on taking possession after closing the sale, extending a proposed closing date to accommodate the seller, waiving inspection contingencies, building in escalation clauses, personal letter from buyer to seller, etc. There are so many ways to make an offer appealing and attractive to set it apart, good real estate agents can get VERY creative 🙂
8.) Don’t just automatically assume that a home inspection will allow you to re-open negotiations. It’s certainly acceptable to ask for a credit, repair, or correction, if the inspection reveals any major problems. But in a “hot” market, you may not get it and the offer may be off the table. Remember, items noted on an inspection report should not translate into a “to-do list” for a seller. It is an evaluation of the current condition of a home and the question to ask yourself is: Are you willing to accept the home in its current condition? Read here for information on home inspections. A seller may not be willing to make significant repairs. If it’s something major, but you still want the home, you may be better off asking for a credit at closing so you can hire your own contractors.
Whether you have questions, are ready to get started in the process and/or have a home to sell, we’ve got you covered! Give us a call, send us an e-mail, text or message us through social media. You can also click here to contact us! We are happy to help!
Randy and Yvonne Hoyt
Howard Hanna Real Estate Services, Jackson
Licensed Realtors & Home Marketing Specialists