Making an Offer
Before your offer to purchase is drafted, signed and sent to the seller, it's essential that you've reviewed and signed Working With Agents and your Buyer Agency Agreement. You'll also have been to the lender by now and should have your pre-qualification or better yet - pre-approval letter from the lender.
Your pre-approval letter is a substantial piece of your negotiations since it shows the seller you're financially able to purchase the home.
Before you submit an offer, you'll need to answer a bunch of questions. Let's look at some common considerations for a buyer interested in submitting an offer to purchase a home.
1) Why is the seller selling the house? Motivation is a powerful tool in your negotiations. Knowing why the seller wants to move might help shift some of the terms of the agreement in your favor.
For example, If you know the sellers are in a hurry to move, this could be beneficial if you'd like to close quickly. The seller might look at you more favorably, if you can close quickly too.
2) How much did the seller pay for the home? This question is popular, but it doesn't benefit the buyer except in cases of short-sale or seller financing.
In a short-sale, the seller would need permission from the bank to complete the sale.
For seller financing the seller should have equity in the home.
There's a bunch of factors that influence your purchase price, how much the seller paid isn't high on the list.
You will want to take note of any improvements the seller has made to the home. The seller's original purchase price may not have a lot to do with the current value of the house, but home improvements are very relevant.
3) How do I feel about the price of the property? This is the perfect question after you've looked at a bunch of homes and finally decided on one.
In a few cases, you won't know if the home is worth it; however, most of the time you'll have a perfect feel for if the house is worth the price or not.
We'll negotiate either way, but it's important to take a moment to think about if you feel like the home is worth it and how far you're willing to go in the negotiations.
You'll probably analyze your market reports or recieve pricing guidance from your agent at this time.
4) What terms are important to you beyond price? Now is the time to discuss when you'd like to close, who you'll use as the attorney, if you'd like to ask the seller to pay closing costs, home warranty information and anything else that might be important to you other than price.
5) Are there any items at the home or in the listing that you want? Submitting an offer on a home is emotional. Before you sign off on everything, you'll want to take a moment and look at the listing and the contract together.
Make sure anything mentioned in the listing that stays at the home, is also included or represented in the contract. And hey, if you want that pool table look for it as well.
6) What does a complete offer look like? Your offer is complete and ready to be presented when all of the terms are cleary identified in the Offer to Purchase and Contract. A complete offer will consist of the contract, your proof of funds or pre-approval letter and copies of any earnest money and due diligence fees.
Submitting an offer on your next home just takes a little planning and coordination. Once we put the pieces together, it's so exciting to move one step closer to negotiating and coming to an agreement.
Please let us know if you have any questions, we're here to help.