Basing Your Offer On the Asking Price
Some buyers always offer 10% less than the listed price. What if the property is listed for $150,000 and is overpriced by $20,000? Even if you offer 10% less / $135,000, you will still be paying $5000 too much. Many times I have heard buyers brag that they bought a home for $20,000 less than the original list price. The truth is, the house was overpriced by $20,000 from the beginning or it would have sold. To protect you, I will provide information of recent sales in the area so you will know you are getting the best value.
2. Making A Ridiculously Low Offer
Contrary to what you see on TV and read on the internet, most sellers have not just fallen off a banana truck – they know what their house is worth – even if they overprice it initially. Like you are wishing for a stupid seller, they too are wishing for a stupid buyer. Writing low offers insults the seller and wastes everyones time. You also run the risk of another buyer stepping in and buying the house while you are in the midst of negotiations with the seller. Even if the seller counter offers to you, they can withdraw their offer at any time until written acceptance.
3. Not Giving Enough Earnest Money
Earnest money shows you are “earnest” or serious about the offer you are making. When your earnest money is low, it waves a red flag to the seller. They may counter offer and request a larger deposit, but once again you also run the risk of another buyer stepping in and buying the house while you are in the midst of negotiations. If there is an unusual circumstance for giving a low earnest money deposit, an explanation should be communicated to the seller when your offer is presented.
4. Not Getting A Home Inspection
The appraisal that the bank does IS NOT a home inspection! Home inspections are performed by licensed home inspectors, not appraisers. Home inspectors find all the things that our untrained eyes miss. This could save you thousands of dollars in repairs later. This is a must for all home buyers.
5. Not Buying Owner’s Title Insurance
Many buyers mistakenly believe that the title insurance the bank requires them to buy (lenders title insurance) will also protect them. THIS IS NOT TRUE! Buyers should also buy OWNERS title insurance. An owner's policy protects your interest in the property against such hidden hazards as: mistakes in recording of legal documents, forged deeds, releases, or wills; undisclosed or missing heirs, liens for unpaid taxes, fraud and other claims that could prevent you from selling your home in the future. This is a fee that can be included in your closing costs and well worth the investment.
Please consider me your resource for Owensboro, KY real estate. I have the experience to help guide you through the home buying process – contract to closing. Call me at 270-903-2167
©Karen Pannell – All Rights Reserved