Do’s and Don’ts when making an offer on a home
After searching high and low for the perfect property, you’re ready to buy! Now, the next step is making an offer that the seller can’t decline. But how do you make one that can help you stand out from the other buyers without overpaying?
In especially competitive markets, figuring out the do’s and don’ts of how to make an offer is important. Sellers are always looking for an offer that gives them the best deal, but as a buyer, you also need to look out for your interests. The secret to a good offer is striking that perfect balance.
What should you do when making an offer on a home?
An offer on a property is a strategic decision. It’s not wise to simply jot down a number and hope the seller will choose it. Here are some things to keep in mind when writing an offer on a house:
Research similar properties nearby
Look at similar properties in the area and see how much they’ve sold for or are selling for. Checking out similar properties will also tell you if the price of the property you want to buy is in line with others in the area.
For a more detailed look into a certain locale, you can get a free suburb report which includes median prices, property information, and market data. Reviewing the suburb report can give you the data you need to figure out the perfect offer price.
Offer your best price upfront
This doesn’t mean going above what you can afford. Giving your best price simply means not lowballing the seller with your offer. Putting an offer down on a house isn’t like a bidding war at the auctions so there’s no need to keep your cards too close to your chest.
Giving a low offer at first in the hopes of getting a bargain could make you lose out on your dream home. Look at your finances and consider how much you’re willing to pay for the property. Remember, sellers and real estate agents aren’t always keen on bargaining with the buyer on price especially if there are other offers.
Figure out the conditions on your offer
Making an offer on a home isn’t all about price. Although how much you’re willing to pay plays a significant role, the conditions you place in your offer also matter. Sellers often look for offers with a good price and reasonable conditions. Fewer conditions could make your offer more attractive to sellers, but don’t trim down on the terms that are important to you just to appease the seller.
You could provide an offer without any conditions attached but that could put you at a disadvantage. Conditions can include passing building and pest inspections, waving cool off periods, fixing issues found in the inspection reports, and the like.
What to avoid when making an offer on a home?
There are also things you’re better off not doing when you give your offer. Here are some common pitfalls to avoid when making an offer on a property:
Making verbal offers
Verbal offers are often not binding and could cause confusion or conflict down the line. To save yourself the headache, always provide a formal written offer to the seller or their real estate agent. This also shows the seller that you’re a legitimate buyer. Meet with a sales agent or a real estate professional to help you through the paperwork and other requirements you must submit.
The formal written offer must include your name and address, the seller’s name and address, financial details, lender’s details, settlement date, conditions of the sale, and other additional clauses.
Not reviewing the contract of sale
Before you make an offer, you should always review the contract of sale. It’s vital that you’re aware of all the terms and conditions of the purchase. In the contract of sale, you’ll see how much the seller is asking for the deposit, the inclusions, and the proposed timeline. Reviewing the contract of sale also better prepares you for possible negotiations.
When is the right time to submit an offer on a house?
The right time to make an offer on a property is when you’re sure about the property and you have the means to purchase it.
If you find a house that checks all your boxes, don’t wait around in the hopes that the seller won’t have other offers and lower the price in desperation. Holding off sending your offer gives others the opportunity to snatch the property up. When you know you’ve found the perfect home, don’t waste time in making an offer.
Getting pre-approved for a home loan can also give you an advantage when it’s time to make an offer. With a pre-approved home loan, you’ll have an idea of how much you could borrow and show sellers you’re serious about purchasing.
Apply for a pre-approved home loan
Get a pre-approved loan by applying online! Talk to our friendly lending specialist today to learn more about your home loan options. Call 13 10 90 or book an appointment with us!
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