Making an offer on a house
Planning on buying or selling a home anytime soon? Make sure you’re at least equipped with some basic information before diving into anything. Being properly prepared in the real estate market is a priceless investment. Read the articles in this section and learn how to deal with real estate time constraints, how know when you’ve found the right home, and how to make smart down-size or up-size decisions.
Lately, housing market is calling for a new set of real estate instructions for home buyers. No longer do you bid over the asking price just to have a house. The days of overlooking severe defects just so you can get your offer accepted are gone. To be successful in today's market, home buyers need to be prepared, plan carefully, embrace negotiation and exercise patience.
In most buyers' minds is a desire to pay a fair price and not a penny more. This is a legitimate concern and makes it essential that you do your homework before you buy. To keep from overpaying, you need to research the local market carefully.
Find out how quickly listings are selling in the perticular area you are looking to buy. Are they selling at the asking price, or are prices being discounted? Ask your realtor for the days on market for that property.
Ask your agent to prepare a market analysis on a property you're interested in buying before you decide what to offer. Concentrate on the most recent sales, which will most closely reflect current market value.
In order to avoid overpaying, you also need to stay within your financial comfort zone. What I believe is one of the most important questions you should ask yourself is...How much is the upper limit that I can afford to pay each month. Remember to add the taxes, Mortgage insurance ( if you're not putting 20% down) and also there is hazardous Insurance and Homeowners Insurance.
Getting pre-approved with a mortgage broker or lender to find out how much you can afford is an obvious first move. Be sure to ask for a total monthly obligation.
It's a wise decision to carefully analyze your financial situation now, and your reasonable expectations for the future before you commit to a specific type of mortgage. Interest rates might not come down again any time soon, so make sure that you're comfortable with the size and kind of mortgage you use to make the purchase.
The rapid pace of home-price appreciation is taking a pause. This means that you can't overpay and hope that a couple of month's worth of appreciation will make up the difference. You also can't count on appreciation to generate the cash to pay for repairs and deferred maintenance.
That's the reason why it is important that you do not waive inspections. More times than not, buyers often make offers without an inspection contingency in order to gain favor with the seller in a multiple-offer competition. Many of those buyers now have a sorry tale to tell. It's not worth taking the risk. Make sure that your contract includes an inspection contingency, even if you find yourself in competition.
Don't let the threat of multiple offers scare you off. Unlike like last year, today's multiple offers don't always send the price higher. If you like a house enough, give it a shot. Just stick to your price limit, and if it doesn't work, move on.
If you're the only buyer making an offer, don't be surprised if the seller doesn't accept your offer. This is where patience comes in. Keep in tune with your notes about what you need to do to the property when you become the owner. Base your offer according to the CMA your realtor has done for you. This way you have a good idea as to the value of this property in comparison to others that you have seen.
Standing firm on your price can be a pretty good negotiating strategy. Don't walk away from a negotiation just because the seller gives you a counteroffer for a higher price. If you're serious about the house, counter back--even if it's at the same price you initially offered. If this is your best and final price, let the seller know.
In some cases, it may convince the seller that this may be the best offer he is going to get, especially if there isn't any other offers coming in. Another contributing factor may be, how many days this home has been on the market. Motivation is alway the key factor, and time may work in your favor.
