Buying a home is typically the largest financial purchase most people make in their lifetime. Of course, you want to get the best possible deal, but with the desirable properties moving quickly on and off the market, how can you position yourself to get the best price when making an offer? By preparing properly, you can be in a great position to write a good offer and have it accepted.
The following tips will help to make sure that you’re off to a good start:
- Obtain a mortgage pre-approval before you go house-hunting. A pre-approval makes any offer you submit much stronger because it lets a seller know that a lender has already evaluated your financial situation and is willing to lend you the money to buy a house.
- Hire a professional real estate agent, and listento them.
While it’s certainly possible for you to shop for a house without hiring a real estate agent, that doesn’t mean it’s a good idea. Many buyers think they can save money by going at it alone, but that’s not necessarily the case. A good agent should have extensive knowledge about your local market and the current sales trends. If a house is priced right, he or she can tell you so. If a house is priced too high, your agent can give you a good idea of how much room you may have to negotiate with. Things tend to get personal if buyers and sellers speak directly, but real estate agents negotiate deals objectively all the time. Good agents are excellent negotiators because they don’t have a personal interest in the property -their only goal is to get you the best deal possible. Another perk of hiring a real estate professional is that they’ll have access to many of the newest listings before anyone else does.
- Write an offer based on home value and not list price. The recent sales in the neighborhood give you and your agent ammunition and information. If a home is priced at or below market value, you’re unlikely to get it for less. If it is priced above market value and has been on the market for a while, a lower offer accompanied by a current market analysis may get you the home. This is where a good agent can be invaluable.
- Gather information about why the seller is moving, their motivation. Does the seller already have a new place and want a quick closing? Is there a divorce involved? Does the seller nothave a new place and therefore would prefer a longer closing or even a rent-back agreement? Ask a lot of questions of the listing agent and the seller because the more you know, the better strategy you can develop.
- Ask for extras, such as washer/dryer or refrigerator. Even if the market is tight, feel free to ask for repairs or other concessions, but understand that you may not get it all. Once you’re in escrow, you have more leverage. Waiting until the end of the inspection period to make your requests is a good strategy. The more you ask for, the better your result is likely to be.
- Remember that terms can be as important as price.Consider removing some contingencies or offer better terms in exchange for a lower price. That could mean removing inspection contingencies, making a bigger down payment, accepting the contents with an estate sale or changing the closing date to accommodate the seller.
- Write a personal letter to “humanize” you and your family. People want someone like them to enjoy the property as much as they did.”
You might be hearing it’s a “seller’s market” but remember that these sellers still need buyers and offers. You need to be prepared to act fast once a home you like comes on the market. Having a pre-approval in hand and a competent real estate agent definitely helps in this regard, so make sure that when the right home becomes available, you’re ready to pounce.