It may take a few weeks or months to find the appropriate home for you. But what happens if you do manage to find the home of your dreams? How do you make an offer and when do you make it?
And, especially in a competitive property market, what should you do to improve your prospects with the seller?
Don’t panic, you can ace your house offer with a few pointers. Below you’ll find all of the answers!
How Do You Make an Offer on a House?
So, you’ve just gone to see a house that appears to be the one. You’re now ready to make a counter-offer! Your real estate agent will normally step in at this point to write an offer letter on your behalf and send it to the seller’s agent.
Because the offer letter can make or break your chances of acquiring the house you desire, it’s critical to have a good real estate agent on your team from the beginning of your home search. A good agent, on the other hand, will be familiar with the entire procedure.
What’s the Process When Making an Offer?
Let’s take a closer look at how the offer-making process works. The steps are as follows:
- First, you’ll view a house and decide you want to make an offer.
- You’ll speak to your real estate agent and, together, you’ll decide what your offer will be.
- Your agent will write an offer letter and send it to the agent representing the seller.
- The seller will respond in one of three ways:
The seller accepts the offer.
Everyone is content. Hurrah! You’re officially under contract and on your path to buying a house once both parties sign the offer letter.
The seller makes a counteroffer.
You have three options: accept the counteroffer, make another offer, or walk away.
The seller declines the offer.
You might next try to make a more enticing offer (if your budget allows) or look for a new home.
The offer letter can make or break your chances when it comes to getting the house you want. But a good agent will know their way around the whole process.
What Should You Know Before Making an Offer?
Here are some crucial recommendations to help you make the strongest offer possible in the lead-up to the actual offer:
- When placing an offer, be as quick as possible, especially if the house hasn’t been on the market for long. Prepare ahead of time by knowing what you’re looking for and assuming you’re not the only one looking at the house—because you probably aren’t. You want to get a jump on the competition!
- Consider the motivation of the vendor. Is it possible for your agent to learn why they’re selling? This could be beneficial to your case. If they’re moving out of town and need to sell quickly, for example, your offer letter could mention that you’re fine with a shorter time frame before closing.
- Find out why the house has been on the market for a long time. If the house has problems, it may affect your offer.
- Have you received any additional offers on the house from the seller? Obtaining this information is contingent on the seller’s agent’s willingness to share information with your agent, but it’s always worth a shot.
- To determine what your offer price should be, your agent will consider the local property market as well as the condition of the home. Will you have to do any renovations? It’s possible that this is a factor.
- Put your current home on the market before you start shopping for a new one if you’re selling it while looking for a new one. You don’t want to find your dream home just to have the deal fall through because you didn’t have a buyer lined up for your existing home in time. It can be a good idea to start the buying process, but make sure you don’t buy a new home before you sell the old one. Here, a qualified real estate agent can assist you with the purchasing and selling procedure.
Keep in mind that your offer should be a solid beginning point. Don’t go too low or too high at first. You could get into a bidding war with other buyers or the seller could make a counteroffer. Your first offer should leave room to negotiate if necessary.
What Is Inside an Offer Letter?
Folks, this isn’t your ordinary letter. The offer letter is a legally binding document that must adhere to your state’s legislation. Another solid incentive to enlist the help of a real estate professional! Whether or not you’re dealing with an agent, some states, such as New York, require that the offer letter be approved by a qualified attorney.
The offer letter is a legally binding document that needs to comply with the laws of your state. That’s another good reason to have a real estate agent take care of it!
And the price you’re offering isn’t the only thing in the offer letter. It may also contain other vital information, such as:
- The amount of earnest money you’ll pay (usually between 1% and 3% of the sale price of the house)
- Your down payment amount
- Whether or not you’ve been preapproved for a mortgage
- A breakdown of the closing costs and who is responsible for paying each one
- If you’re selling your current home, details of the contract and closing date
- Your offer’s expiration date
- For a personal touch: A handwritten note from the buyer to help you stand out in a competitive market
What Are Contingencies?
If the seller accepts your offer and wants the sale to move forward, the seller must agree to the contingencies in the offer letter.
It’s up to you and your agent to pick what to talk about. Making the house available for a home inspection and revealing any hazard inspection findings or structural issues with the house are standard stipulations.
It’s also typical for the seller to agree to the buyer’s mortgage lender having their home assessed. You should always keep a few contingencies on hand, but not too many.