After looking at various houses with your realtor, you finally find a house you would like to make an offer on! Your realtor will be an important ally in the offer/negotiation process. They know the surrounding real estate market and current real estate trends. They will remind you about key factors in making an offer:
- Current Interest and how likely/soon rates my change.
- School Taxes.
- Property Taxes.
- Comparable home values in the area.
- How aggressive the housing market is.
Your realtor will draft your offer letter which contains:
- Offer price.
- Are there repairs/work that has to be done to meet your expectations? You can make it a requirement that those issues are resolved by the time of closing.
- Detailed list of what is part of the offer, such as remaining appliances or furniture.
When the offer letter is completed, your realtor will be send it to the realtor of the homeowner for review. It may be accepted by the homeowner, but you should be prepared for:
- Your offer is rejected. At this point, work with your realtor to create your final and best offer. If after reviewing your best offer the homeowner refuses to negotiate or open a dialogue through their realtor, then it would be best to move on. If a dialogue is open for negotiation, lean on your realtor for advice and start the negotiation process.
- Competing bids. Other home buyers may be interested in the house you bid on. They may have better offers because of a higher offer price, less contingencies, or have more negotiation power with larger budgets. Again, if there is competition, it’s time to submit your final and best offer. If a competing bid is better than yours, then unfortunately the house hunt continues.
Remember, your realtor wants you to close the deal, so a motivated realtor will steer you in the right direction to find you a new home. And don’t get discouraged if your first offer isn’t accepted because there will other opportunities in the near future.
If your offer is accepted, you will be asked to put a down payment to hold the home as well as sign a binder showing your intent to purchase the home at the agreed upon price.