You have searched far and wide for the perfect property, and now you have finally found the home of your dreams. After attending endless open houses, scouring the internet for new listings and pestering your real estate agent for showings, you have found the perfect home for you and your family.
Now comes the hard part - making an offer and sealing the deal. If you are lucky enough to be shopping in a buyer's market, you may have the property all to yourself, and you may be able to come out with a hefty discount. If not, you may well be competing with lots of other would-be buyers, and you will need to make your offer stand out.
Regardless of the situation, there are some key things you need to know when preparing your offer. Here are some points to consider when putting in an offer on a home.
Do Your Homework
The first thing you need to do is assess the local real estate market, something that can be surprisingly hard to do. The real estate market does not move in concert, and some parts of the country may remain strong even when housing prices are sinking nationwide.
You can learn a lot about the strength of the housing market overall by watching the news and reading the financial press, but assessing the local market means delving deeper. Are houses selling lot hotcakes in your area, or are they lingering on the market for months? The more you know about the local market, the easier it will be to craft your offer.
Get Pre-qualified First
If you are flush with cash, you may be able to forgo the mortgage qualification process, but few buyers are that lucky. If you will be seeking a mortgage, it is best to get pre-qualified first.
When you make an offer, the seller will want to know you have the money to back it up, and getting pre-qualified for a mortgage can move you to the front of the line. You will need to find a mortgage anyway, so there is no reason to put it off.
Research the Offer Requirements
There is no single universal requirement for real estate offers, so it is important to research the local rules and regulations. Your real estate agent can help you with crafting the offer, so be sure to ask for assistance as you move through the process.
Regardless of where the property is, there are a few key things the offer will include. Among them will be the date of the offer, the address of the home and a description of the property, along with the price you are offering. The financing terms and loan details, including the size of the down payment, the closing date, the escrow details, also should be listed, as well as the proposed possession date and any contingencies that would allow the buyer to cancel the contract without paying a penalty.
Protect Your Investment
When you put in your offer, you are of course hoping to secure the home, but it is important to protect your money throughout the sometimes confusing process. The proposal will include details on the size of the down payment, and how the parties handle that money also is very important.
You should arrange to have the down payment amount held in an escrow account. That allows the money to be returned to you if the offer falls through. While you hope that does not happen, it is important to prepare for this possibility.
If the offer is accepted, the amount of the down payment will be deducted from the amount owed to the seller at closing. In the meantime, the seller, or the seller's agent, will get the offer. The seller will have the final say on whether to accept the offer, reject it outright or make a counter proposal.
Putting in an offer on a home can be a confusing process, especially for first-time home buyers. Knowing what to expect going in can make your life easier and give you one less worry. The tips listed above can guide you through the offer process, so you can finally get the keys to your dream home.
