How To Buy Your Dream House In 7 Steps: Step Five

Written by Posted On Tuesday, 25 February 2014 11:11

Make An Offer They Can’t Refuse

This is part 5 of a series of 7 articles that guide potential buyers through the home buying process. These articles provide insight and suggestions to help homebuyers find the home of their dreams.

Step One: Get Your Finances In Order
Step Two: Find An Agent
Step Three: Get Pre-Approved For A Home Loan
Step Four: House Hunting

Once you find your dream home and are ready to make it yours, work closely with your agent to put together a well thought out and strategized offer. Before you make an offer and start this part of the process it is a good idea to read up on some buyer tips for negotiating so you’re prepared when that part of the process rolls around.

We talked about it last week when discussing house hunting but I’ll remind you again – make back-up offers in your home search. If a home is already in escrow or has another buyer, don’t give up just yet if it is the home of your dreams. You never know what could happen and putting in a back-up offer could end up scoring you the house you've been dreaming.

Now onto tips on how to make an offer on that perfect house you've found…

Tip 1: Do your homework on pricing and market trends

One of the most important parts of your offer is the price you’re offering the seller.  The first thing to do when coming up with an offer price is to look at sold prices for comparable homes in the neighborhood. It is important to look at sold prices not listing prices; sold prices give you the most accurate picture of the local market and what you should expect to pay for a house in the area. If you’re working with a First Team agent they will do a CMA or Comparative Market Analysis report to review sold homes in the area.

It is also important to have an eye on market trends, for example whether or not the area is experiencing a buyer or seller’s market. This could have a huge impact on how much you should offer and how much you can afford to negotiate with the sellers. While it is common to make an offer below the asking price, it is generally unrealistic to offer more than 5% below a seller’s asking price in any market unless the home has been sitting on the market for a substantial length of time.

Tip 2: Be ready for negotiations

Price isn’t the only thing that goes into your offer. In fact there are over 40 points of negotiation other than price on the offer contract alone.  Take the time to walk through the contract with your agent and decide on each point what you want and how you will try and get it. Your offer should include contingencies on a home inspection, who will pay closing costs, a home warrantee can be negotiated and timelines for loans, closing and escrow will be set.

Remember, just because you present an offer does not mean a seller will simply accept or reject it. Your offer will more than likely open the doors for a counter offer and further negotiations. Prepare yourself by reading up on what buyers can expect when negotiating and get yourself in the right mindset for what’s to come.

You may give a higher offer price than you originally wanted but negotiate for repairs paid by the seller. You may offer a significantly lower price than the sellers want yet offer to pay all of the closing costs. There are endless possibilities and scenarios that could work for you and the seller so just be persistent and keep trying to find the right balance.

Tip 3: Listen to your agent

You hired them for a reason – because you trust them and believe in their expertise. Accept their advice because they’ve been through this before. Following your agent’s lead is the best way to come out on top and keep you unemotional and focused when you’re putting together your offer.

Make sure your agent has a plan and discuss your strategy for the offer. Be clear with your agent about what your goals are and what’s most important to you in your home purchase. With a clear plan and an experienced agent on your side, you’re on the right track to making the winning bid.

If you a prospective buyer and interested in finding an agent to guide you through the home buying process, email us at clientservices [at] or call 888-870-1142 and we’ll connect you with a top agent. Tune in next week when we debunk the next part buying process – securing financing for your home loan.

Buyers – What questions do you have about making offers on homes for sale?

Agents – Do you have any tricks and tips for buyers on making an unforgettable offer?

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