Finding the right home is only half the battle – the next stage is often considered the most stressful: negotiating the price you will offer for the home.
During this part of the home buying process, any number of things could go wrong – ranging from a competing buyer’s all-cash offer to an insufficient earnest deposit from you.
In markets with houses in short supply (like right now!), sellers have the advantage over buyers and bidding wars often erupt with multiple buyers battling over the same home. You don’t want to risk losing that home you’ve put so much effort into finding, so ARC Realty has a few tips for when it comes to making the best offer.
Get Preapproved First
If you can’t pay cash, you’ll need to get a mortgage. You should check your credit reports three or four months before you begin shopping for a home. This will give you time to dispute any errors and take short-term steps that will improve your credit score if needed.
Then apply for a preapproval from your favorite lender. This preapproval letter will show sellers that a lender has verified your income and credit score and determined that you can afford payments on a mortgage for a certain amount, meaning you’re less likely to have problems purchasing the house on closing day.
Make a Smart Offer
You may only have one shot to get it right, so in a competitive market it is important that you make a smart offer, which is easier when you have the help of a real estate agent who can ensure you are not paying too much for the home or making an offer that is too low and therefore less likely to be seriously considered.
It is also pertinent when making an offer that you know what you’re really willing to pay for the home and what you can realistically afford. Base your offer on recent sale prices of similar properties in the neighborhood so that it will pass muster when the home is appraised.
In a competitive market, low offers are often ignored. In these situations, if you hold back thinking you’ll sweeten the offer on the second try then you could very well lose the deal to another buyer.
Make Things Easier for the Seller
One of the best ways to “sweeten the pot” is by being flexible and making things easier on those who are selling the house. For example, if you are willing to be flexible with the closing date or allow the seller an ability to rent back for a short period if they need to remain in the property post settlement, then it could go a long way at putting your offer in front of the competition.
However, it is very important that this information is documented correctly and in a way that protects you, the buyer. Therefore, make sure you have a real estate agent on your side to ensure you are taken care of throughout the process.
The process of buying a home is a delicate one and it’s important to take the appropriate steps to help you not only get the home that you desire, but also help to ensure you are protecting yourself throughout the process with professional representation.
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