Have you been looking for a home and finally found one you want to purchase? If so, know that the process is not as simple as you think it is. Making an offer on a home gives you the opportunity to negotiate on the price, and with the average home costing $188,900, that gives you a lot of wiggle room to get a deal. Here is what you need to know about making an offer.
Ask a Realtor to Draft Your Offer Letter
The best advice you can get when making an offer on a home is to use a realtor. They handle most of the transaction for you, which includes drafting the paperwork for the offer and talking to the seller's agent. The offer is a legally binding contract, so it is important that it has all the necessary contingencies in it that allow you to get out of the deal if things go wrong.
For example, there will be a requirement that the owner can provide a clear title on the home, meaning that there are nobody else has a right to ownership through pending lawsuits or judgements against them. There should also be contingencies based on having a home inspection, which gives you an opportunity to inspect the house for structural problems.
State Your Price & Financing Method
You do not have to offer the price that the owners are asking for. If the home has been on the market for a while and nobody is interested, you may be able to offer less than the asking price to get a deal. Keep in mind that the seller can always reject the offer completely or counter offer with a new price. Each time you counter with an offer of your own, you will lose the previous offer given. The seller must agree to the final sales price after each round of negotiations.
The seller will also want to know your financing method, which could impact how quickly you can close on the sale of the home. For instance, if the owners are looking to sell quickly, they may be more likely to take an all cash offer since they know that the buyer doesn't have to get financing approved. Expect to supply your pre-approval letter from the bank to prove that you can get your mortgage for the amount you need.
If the seller approves your offer, you will move forward with addressing all contingencies in your offer letter. You'll be expected to immediately start moving forward with financing and your home inspection within the next few days. To learn more about the process, contact a local real estate agency.