Searching for the right house for you can take a few weeks or even a few months. But what happens when you find the house of your dreams? How and when do you make an offer?
So, you’ve just viewed a house that looks like it could be “the one”, and you’re ready to make an offer. This is when your real estate agent usually steps in to write an offer letter on your behalf and send it to the seller’s agent.
Follow these steps to make a strong offer:
1. Speak to your real estate agent. Together, you can decide what the offer will consist of.
2. Before submitting an offer:
a. Determine if there are relevant issues or circumstances you should know about. Is the seller motivated to sell quickly because they’re leaving town? Has the home sat on the market a long time? Why? Your agent should conduct a bit of research to ensure your offer is best positioned for you.
b. Find out if the seller has received any other offers
c. Your offer should leave room to negotiate. Do not start too high or too low
3. Include these components in your offer:
a. Mortgage preapproval letter
b. Amount of earnest money you’ll pay (money you put down as a good-faith gesture that you’re serious about buying a house; typically it’s 1-5% of the purchase price)
c. Down payment amount
d. Closing cost breakdown/allocation
e. Offer expiration date
f. Any contingencies and/or related amendments
g. For a personal touch, a handwritten note to the seller to help you stand out in a competitive market
Purchase offers generally become legally binding once the seller accepts the terms, so it’s in your best interest to fully understand the offer and its implications. Strong communication with your agent is critical to ensure your offer is solid. As daveramsey.com explains, “A good agent will be able to scan the market, look at the house in detail, and work with you to present your strongest offer”.
Sources: daveramsey.com; thebalance.com; moneycrashers.com
