Buying a home is one of the most exciting journeys for most people. But before you are given the keys to your new place to move in, there is the possibility of making an offer on the house. Maybe you have been scouring houses and have found the property of your dreams. How do you make an offer the seller will not refuse? You want to ensure that the offer is not too low to scare away the seller, but you also want to ensure you have room for negotiation. How does one go about it? Take a look at these tips on how to make an offer on a house.
1. Do Some Research
Before settling on one property, research all the properties in the area. For instance, if you have set your eyes on new construction, take a look at the asking prices for similarproperties. Even better, check the recently sold properties in that area. This will give you a clear picture of the correct market value in that place. If it is a slow market, you are lucky because you can get away with a low offer. It is also good to understand why a seller has put a house on the market. This can allow you to customize your offer to meet the seller’s needs and have your offer accepted.
2. Go Easy On The Contingencies
Real estate contingencies allow a home buyer to back off from a home sale and get their earnest money back. There are different types of contingencies that one can include in a purchase offer. In a hot real estate market, too many contingencies will work against you. So, it is best to be creative. Forget about the minor details and focus on the bigger things that must be addressed. For instance, if a home inspection shows that a house needs minor repairs, try negotiating for a lower price instead of demanding the repairs be done before closing.
3. Get Pre-Approved For A Loan
If you want to show the seller that you are a serious buyer, provide evidence that you can get the money to pay for the house. That means getting pre-approved for a loan. Apply for a pre-approval earlier in the process. It will place you in a better position to bargain, and you will also shop for a house with a budget in mind.
4. Offer Earnest Money
In any transaction, money has a voice. So it is good to decide how much earnest money you want to offer. This is a good faith deposit that is usually about 1 to 2 percent of the total price of the home. The more money you offer, the better you look to a seller. That is because you come off as a serious buyer with enough resources to back up a purchase. That money will be put in an escrow account, and when the deal goes through, it is added to your down payment.
5. Make Your Offer
Write a personal letter to the seller with your offer. It is okay to share some information about yourself and why that particular house has caught your attention. Ensure that your offer will be compelling enough to help your case. At the same time, you should also think of your counter offer because a seller may refuse the initial offer but be ready to negotiate.
Making a winning offer is often a complex process. You are worried about offering too little or paying too much. The key is to try not to overthink the situation. And if your offer is rejected, try not to get upset. It is a competitive market, and sometimes one loses. That experience can be a lesson as you continue your home-buying journey.