Buying a home is frustrating enough as it is, but it’s even harder when you’ve made offers on multiple homes only to lose out each time. Once you find a house that fits your needs, it’s time to buckle down and actually make an offer that will be accepted.
Freddie Mac covered “4 Tips for Making an Offer” in their latest Executive Perspective. Here are the 4 Tips they covered on how to make an offer that will give you an edge over other homebuyers.
- Understand How Much You Can Afford
This tip should really be your first step before you start your home search process. Fully understanding your finances is critical and before making any offers, ask your lender for a pre-approval letter, which states that you’re provisionally approved for a mortgage loan up to a certain dollar amount.
Getting pre-approved will also show home sellers that you are serious about buying, and will allow you to make your offer with the confidence of knowing that you have already been approved for a mortgage for that amount.
- Act Fast
According to the latest Existing Home Sales Report for Denver, the inventory of homes for sale is currently at a 6-week supply; this is well below the 6-month supply that is needed for a ‘normal’ balanced market. When home inventory is low, the sooner you can make an offer, the better. Work with your agent to present it as soon as possible.
- Make a Solid Offer
Freddie Mac offers this advice to help make your offer the strongest it can be:
“Your strongest offer will be on the high sides of other sales and listings in the neighborhood. A licensed real estate agent active in the neighborhoods you are considering will be instrumental in helping you put in a solid offer based on their experience and other key considerations such as recent sales of similar homes, the condition of the house and what you can afford.”
Also, make your offer clean and sweet. Add value to your offer in ways that may save the seller some bucks. Many buyers write a personal letter to the seller letting them know how much they would love to be the new homeowners.
Other strategies to strengthen your offer include waiving inspection or limiting negotiable inspection items to health and safety issues, offering to bring extra money should the appraisal come up short of the agreed selling price, or including an escalation clause where you agree to pay X dollars above the highest offer, not to exceed a specific $ cap.
Give the sellers enough reasons to pick your offer over offers from other bidders.
- Be Prepared to Negotiate
In some situations, sellers who receive multiple offers at once negotiate with each prospective buyer individually in an attempt to get the best possible deal. When negotiating, make sure you don't get carried away by how much you like the property and overstretch yourself with an offer that exceeds what you can realistically afford.
Also, if the inspection uncovers undisclosed problems or issues, you can discuss any repairs that may need to be made with the seller.
If you’re ready to look at getting started on your path to home ownership, contact your local metro Denver real estate professionals, The Bandy Team! Our team will guide you through all phases of the home buying or home selling process in Denver. Let us show you homes in some of the fine communities of Castle Rock, including real estate in Castle Pines, homes in Founder's Village, or property in The Meadows.
We are here to help you find your dream home and will guide you every step of the way!
Until next time,
Marianne Bandy, Team Leader
The Bandy Team
Keller Williams Park Meadows