It’s crunch time. You can’t avoid it any longer. (Tips on How To Make a Successful Offer)
Your financing is in place. Your real estate agent found you the perfect home. Now, it’s time to make the offer.
Will they accept? Will they reject? What if you make the wrong offer and blow it?
These are all thoughts that run through home buyers’ heads. It’s completely natural to have these thoughts, so don’t feel bad. It’s a fact that buying a house is the biggest purchase most people will make in their lives.
By the end of this article, you’ll have what you need to make an intelligent offer on the home of your dreams. Even if it gets rejected at first, you’ll be first in line for backups with an offer like this.
We’re going to talk about the different types of offers, the purpose of a home purchase offer letter, and how to make a fast home offer. All of this information is important in a market like this one. You can’t afford to not read this article.
So, stick around and read along with us. Your home offer class is now in session.
Education Is Key
The first step is to learn how the offer process works. Chances are you’re working with an agent. If that’s the case, all communication will go through them and the listing agent.
In some cases, your agent may happen to be representing you as the buyer and representing the seller. This makes things a little easier because you only have one person communicating between both parties. When you’re dealing with a separate agent for both buyer and seller it can be a little tough to get everyone on the phone.
When you work with an agent, you’re dealing with a professional. They have more than a handful of transactions under their belt. They know how the process works.
As a result, they’ll be handling all of your paperwork. The contract, or sales agreement, you use will be dictated by your State government. Your agent should have knowledge of the important clauses in the contract, as well as any addendums that need to be added.
Addendums are just clauses added to the end of a contract to handle special cases. In the case of buying a house, they may handle which items convey with the property, if the property has any lead-based paint, or if a tenant needs to leave the property before purchase.
Your agent should be explaining any addendums to you, so you don’t need to know that much about them. But, it helps to know the term when it comes time for your contract negotiations.
Know Your Budget
The strength of your offer isn’t going to matter if you’re buying more house than you can afford. That’s why it’s important to spend the time nailing down your income, expenses, and what you can afford monthly. That’s an important distinction, monthly.
More goes into your house than just your mortgage payment, interest, taxes, and insurance (PITI). You also have to account for things like repairs, electricity, gas, trash, sewer, water, pest control…you get the drill.
That’s why it’s important to break down a monthly budget. Sure, knowing you qualify to buy a $275,000 house helps. But, what does living in a $275,000 house look like on a daily basis?
Which, brings us to another important point. No potential home buyer should be shopping at the upper limit of their budget. If your mortgage lender says you can afford a $275,000 house, that doesn’t mean you set up showings at a bunch of $275,000 Zillow listings.
Breaking things down monthly gives you a realistic picture of exactly how much house you can afford.
So, do it. The End.
Get A Preapproval
Do not go home shopping without getting a pre-approval letter. Period. Homeowners and agents both won’t take you seriously without a pre-approval letter.
This letter will come from your mortgage lender. The letter will state that the bank approves you for enough funding to cover the price of this particular house. If you don’t have one, even the best offer will fall on deaf ears.
You’re basically “window shopping” without one.
Find The Right Agent
Believe it or not, this actually piggybacks nicely off of getting a preapproval letter. It may be a bit of a pain, and an extra step in the process, but you want an agent that requests a preapproval letter.
This means they don’t have time to fool around. They’re busy doing real deals with real clients and making real offers. This is the type of power player you want on your team.
Most potential buyers get an agent recommended to them through friends or family. Nothing is a stronger referral than a recommendation from a trusted friend or family member. But, an agent who asks for a preapproval letter on top of that is a good indication that you’re working with someone serious.
Tips On How To Make A Successful Offer Fast
This isn’t the time to get cold feet. Especially in today’s real estate market. Properties move fast, especially if they’re in the type of neighborhood you want to be in.
You’ll need to be ready to move quickly and make a strong offer when something you like comes up. There are a few things you can do to help speed things up.
Cash Is King
One way to speed up the process is to make cash offers for homes. A lot of people aren’t in a position to pay cash. But, if you are, use it to your advantage.
The nice thing about paying cash is you can often get a discount from the seller. They may take less money since a cash offer can close much faster than an offer that needs traditional bank financing.
Home Purchase Offer Letter
Another way to speed up the process is by using a home purchase offer letter. It’s not something that agents typically use but if both sides are familiar with it, it can really speed things up.
A home buying offer letter is a very short, abridged version of your offer. It isn’t sent on a full-length State contract. The letter is a simple one-page letter that gets straight to the offer information.
It outlines the price, closing date, down payment, and any other important terms, in a short and sweet one-page format. Your agent will still need to follow up your offer letter with a fully executed State contract. But, the offer letter is a quick way to start off the process.
Little tricks like the offer letter come in handy in extremely hot markets.
Dig Deep With the Seller
This tip is more for a “for sale by owner” situation. When you’re dealing with a real estate agent, all communication has to go through them. And, State law prohibits them from telling you certain things about the seller’s situation.
But, if you’re in a home buying situation where you have a direct line to the seller, you need to find out what they really want. Sure, price is important, but there may be other things they’re trying to accomplish.
For example, they may want to retire and travel the country. They might be using the cash from their home sale to buy an RV. Sometimes, a seller may need to relocate for a job or military deployment.
We could go on and on. The point is, there are a lot of real-life scenarios where the seller may want something other than just money. If you’re negotiating on your own, without an agent, it’s your job to figure out.
Check Emotions At the Door
It’s easy to get excited or nervous when you’re putting an offer in on a house you really love. But, it’s important to leave your emotion out of it. That’s key to making the best offer possible.
There’s an old negotiation saying, “always be willing to walk away”. You have to have that mentality when putting in offers on potential houses.
Not all offers are going to work out. Trust us, for your sake, we wish they would. But, real life doesn’t work that way.
You need to be prepared to leave the negotiating table if the deal doesn’t work for you. But, we know that’s easier said than done. Most times, buyers are spending more money than they’ve ever spent on anything.
In addition, it can be hard to walk away when you fall in love with a house.
The best way to foster the “walk away” mentality is to have multiple showings and multiple offers going on at any given time. That way if a particular house falls out, you have another offer on a house you love to back it up.
Bye Bye Buyer’s Remorse
We hope, with these tips on how to make a successful offer, you can make the best offer possible on a house you love. Armed with this knowledge, you can lose any feelings of anxiety or nervousness and go into your home purchase with confidence.
If you need help getting that preapproval, finding an agent, or any other steps of the home buying process, contact the pros at RealFi Funding. Let us leverage our expertise to give you the best home buying experience possible.
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