Your First OFFER!
/For everyone involved in a real estate transaction the process is stressful, in my opinion it kind of should be. You’re asking yourself “why would that be”? Well it is simple this is in many homes the biggest financial decision you will make for your family. This is why the Real Estate agent and Mortgage Lender you decide to choose should be experienced, because it’s not “if” something will happen but rather “when”. Experienced agents and lenders have seen enough transactions to help guide you through the waters of buying your home. I wanted to give you a few key things to think about when putting in that offer!
Get Pre-Approved for a Mortgage: Before making an offer, it's important to get pre-approved for a mortgage from a reputable lender. This will give you a clear understanding of how much you can afford and demonstrate to the seller that you're a serious buyer.
Determine Your Offer Price: Consider the current market conditions, comparable sales in the area, and your budget to determine your offer price. You may choose to offer the full asking price, go below asking price for a more competitive offer, or offer above asking price to stand out in a competitive market.
Include Contingencies: Contingencies are clauses in the offer that protect the buyer. Common contingencies include financing contingency (to ensure you can secure a mortgage), inspection contingency (to allow for a professional inspection of the property), and appraisal contingency (to protect against a low appraisal). Including these contingencies gives you an option to back out of the deal if certain conditions are not met.
Earnest Money Deposit: You'll need to include an earnest money deposit, which is a show of good faith and commitment to the offer. Typically, this is a percentage of the sales price, such as 1-3% of the purchase price, and is held in escrow until closing. Be prepared to provide this deposit within a few days of the offer being accepted.
Flexibility in Closing Timeline: Consider being flexible with the closing timeline. Sellers may have their own preferred timeline, so being accommodating can make your offer more attractive. Alternatively, you can request a specific closing date that works for you depending on your current lease expiration.
Work with a Real Estate Agent: It's highly recommended to work with a qualified real estate agent who can guide you through the process and negotiate on your behalf. They can provide expert advice on structuring the offer, making it more competitive and favorable to the seller. Just remember that not every offer will be accepted, as a agent that has worked on many multiple offer scenarios all you can do is submit your best offer but given enough time and patience you WILL get a deal done.
Be Prepared for Counteroffers: The seller may counter your initial offer with different terms, such as a higher price, different contingencies, or other changes. Be prepared to negotiate and consider your options carefully before accepting or countering their counteroffer.
Review and Understand the Purchase Agreement: If your offer is accepted, you'll receive a purchase agreement to review and sign. It's crucial to understand all the terms and conditions of the agreement, including contingencies, deadlines, and any additional clauses.
Hire a Qualified Home Inspector: Once your offer is accepted, schedule a home inspection to assess the condition of the property. If any issues are identified, you can negotiate repairs or credits with the seller during the option period. It is important to remember that this timeline is generally 1-2 weeks and in many multiple offer scenarios many buyers opt out of the option period. You can still have a inspection done but if you opt out of the option period just know that you are doing it to give yourself a heads up of the work to be done not to renegotiate.
Prepare for Closing Costs: As a buyer, you'll need to be prepared for closing costs, which include fees for appraisal, title insurance, attorney fees, and other associated costs. Make sure to budget for these expenses in addition to your down payment.
Stay in Close Communication with Your Lender and Real Estate Agent: Finally, stay in close communication with your lender and real estate agent throughout the process to ensure a smooth and timely closing. Respond promptly to requests for documents or information, and stay updated on any changes or updates.
Remember, the best way to structure an offer on your first home will depend on your specific circumstances and the local market conditions. Working with a qualified real estate agent and mortgage lender can provide invaluable guidance and expertise to help you navigate the process successfully. Good luck!