A Step-by-Step Guide to Making an Offer on a Home
It's time to submit an offer now that you've picked the ideal house. Even though it can seem like a basic job, it involves more than just blabbering a random number. We've defined the processes to help you from beginning to end as you submit an offer on a house.
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Ensure that you are pre-approved and have finance in place
Make sure you have your financing arranged in advance before making an offer on a house. You'll need to be pre-approved for a mortgage unless you're paying cash. This will not only convince sellers that you mean business, but it will also enable you to determine just how much house you can afford to buy. The speed of this process will also be aided by the presence of a real estate lawyer.
Make a note of your offer number
To come up with a strong bid number, collaborate with an agent. They will have done research on similar houses in your neighborhood and can advise you on what a fair offer would be. It requires balancing. While you don't want to bid too low, you also don't want to pay more than you can afford.
Identify potential pitfalls
Contingencies are requirements set forth by the buyer and seller that must be met for the house sale to proceed. Either party may withdraw from the deal if certain requirements or circumstances are not met.
Among the most typical are:
Do you have tough competition? If so, you might want to think about dropping a condition in order to impress the seller and beat out other offers they might be considering.
Place a good faith deposit down
If you're making an offer, you'll need to put some money down before closing because money talks. This good faith deposit, often known as earnest money, ranges from 1% to 3% of the cost of the house. Nevertheless, some buyers might decide to put down more.
However, this money does not go straight to the vendor. Instead, it is kept in an escrow account and used for your down payment amount. Putting down this initial, modest sum demonstrates your readiness and financial capacity to proceed with the home purchase.
Agent prepares the offer letter
The offer letter will be written by your agent on your behalf. Basic details like the price you wish to offer on the house, the name or names of the people who will be included on the title, the address of the house you want to buy, and the date you expect to move in will all be included in this document.
The offer letter will additionally describe:
Mortgage pre-approval letter and the date you want to settle, or finalize your loan, are the conditions the property must meet for the transaction to proceed concessions you'd like the vendor to make (ie. repairs and other costs)
Send the offer letter in
It's time to submit your offer now that you've worked with your dependable real estate agent to prepare it. The time period specified in the letter should be used by sellers to respond to your offer.
If the seller counters, engage in negotiation
The seller could make a counter offer after you've submitted your initial offer. No need to be alarmed; this is very natural. You might have to raise your offer price, remove concessions, or waive a contingency. Determining if you can meet the seller's counter offer requirements or arrive at a solution that benefits both sides will involve consultation with your agent and attorney.
The offer is either accepted or declined
It's time to celebrate, albeit briefly, if your offer is accepted. Surprise! Before you can claim ownership of the house, there is still work to be done. The closing procedure can now be continued.
It might feel like getting punched in the belly when your offer is declined or you are outbid. Stay strong, champ! Don't be scared to take a break if you're experiencing bidding war weariness because this can feel like a significant failure. Review your approach once more, then resume your home search.