When you are shopping for a home, and it finally happens, you finally find your dream home. You do not want to overpay but, at the same time, you have to make sure the seller accepts your offer. How will you manage to make sure that you attain both of these goals?
There are several things you will want to consider before submitting an offer on your dream home. Every housing market is different, so there is not a one-size-fits-all solution when it comes to the best strategy for how to make an offer on a house.
The first thing you need to figure out is. What your dream home is valued at in the current local housing market? Take some time to find homes in the same area that have sold recently. Make sure that they are of similar age, size, and include the same features as the home you are wanting to make an offer on.
Once you have located the final selling price of local and recent comparable properties, you should have a lot better idea of what you should expect to pay for your dream home.
Whether you decide to offer below or over that amount is to still be decided by other factors.
How long has the home you are planning to make an offer on been on the market? If it was just listed the buyer is probably still going to expect to at least get their asking price. If you try to lowball them, with your offer, they may not even respond to your offer.
However, if the home has been on the market for a while, has not recently lowered its asking price, and other homes are not selling in the area. You can probably offer them a lower amount and they may consider it if they do not want to wait for someone to offer more.
Normally if make an offer in the amount of the asking price on a property, there is no way that the seller will not accept. So if you can not live without the property sometimes that is the best strategy to make sure that you can get your dream home under contract.
When the housing market in a certain area turns into a seller’s market, some agents will list homes for lower than they are valued on purpose to start a bidding war. If you are in an area where houses are flying off the market you may want to make sure to lead with your strongest offer to ensure that you even have a chance at securing the home.
Once you do all your research and you decide the amount that you want to offer on your dream home, you will need to prepare an offer letter to submit to the seller. If you have a real estate agent helping you, there is a good chance they will handle this process.
This offer letter will not only include the amount you are willing to pay for the house, but it will also include other stipulations. It may include a purposed amount of escrow. Which is an amount of money you give the seller to hold on to until the closing of the house, and it can be used towards the down payment on the home.
Remember to make sure that you know what the home you are wanting to purchase is worth. Do your research, stay calm, and do not let your emotions make you overpay. Yes, you want the house and you may even feel like you have to have it, but you will regret it if you end up overpaying and can not get it financed. This is a huge choice, so make sure you think with your head and not your heart.