You've found the perfect house in the perfect location, and it's so close to being yours! But, before you can make an offer, there are a few tips you should keep in mind to be sure that everything goes as planned.
1. More or Less?
Making an offer on a home isn't always about getting a discount off the list price. Oftentimes, especially when you know other buyers are looking, you might be entering into a bidding war. If your initial offer happens to be below the asking price, the seller is likely to come back with a counter-offer that's higher. If your offer is higher than the asking price, whether or not you get the home will depend on the offers of other buyers.
Your real estate agent will be able to guide you through the process and help you determine what's fair.
2. Don't wait around.
There's no need to try and build suspense. If the counter-offer is out of your price range, reject it. If it may or may not be within reach, it's up to you to make up your mind quickly before the offer expires. Rushing a decision, however, can have consequences so be certain you are sure about the home before you make an offer at all.
3. Think twice about waivers.
You might be tempted to waive inspections and all other contingencies just to get your offer accepted, but consider the issues this could cause. It's good to keep this layer of protection in place, even if it means a counter-offer at slightly higher price points, or a rejection.
One contingency you’ll certainly want to keep in place is the financing contingency. You should already be preapproved prior to making your offer, but the unthinkable can always happen. What if that financing falls through because you or your co-signer lose your job? This could stick you with a home you simply couldn't afford because the seller accepted your offer without contingencies.
The appraisal waiver is also a risky one to make, because it says you deny your right to re-negotiate the sales price if the appraisal comes back lower than what you offered.
4. Include earnest money.
Earnest money is money that you put down as a deposit to show that you’re serious about your offer. It tells the seller that you’re ready to buy, and you aren't messing around with back-and-forth negotiations. How much to put down is all relative. You might put down $1,000 while another puts down $5,000. Ask your realtor for guidance.
5. Try for the "halo" effect.
Some neighborhoods are being clawed at by every buyer on the market. They have all the best shopping centers, the coolest coffee shop, and all the amenities you can want. Houses get swiped up quickly and people pay a pretty penny for them. Rather than aiming for the center of this hot-spot, try for the halo effect by looking in surrounding areas.
6. Go in with a plan.
Don't just make an offer and see what happens. When you make an offer, make a decision about what you’re willing to pay and what terms you want included in the deal. Don't sway from these commitments during the excitement of the negotiation process.