In my last post we discussed finding, viewing, and choosing potential properties. I this post we’ll talk about The Offer. We will focus on what it takes to make a competitive offer and let the seller know that you’re serious!
So you found a house that you like and you want to put in an offer. So how do you make a competitive offer? Here are a few things that should be included to make your offer stand out from the rest.
Include your pre approval letter from your lender. This is important because it lets the seller know that you can afford the house and has been verified by the bank. An offer with a preapproval letter will most likely get the nod over an offer without one. It also lets the seller know that you are serious.
Don’t be a tire kicker! Make a competitive offer and let the seller know you are serious. Don’t make the mistake of presenting a low-ball offer with the hope of getting a great deal. This is especially true if there are multiple offers on the table. The seller will quickly move on to the next offer. You most likely will not receive a counter offer and possibly insulted the seller.
Money! Put down a reasonable earnest money deposit. What’s an earnest money deposit? When an offer is submitted, you will be required to include money up front in the offer. This can be any amount of money, but typically it’s 1% of the asking price. If feasible, do not offer less than 1% try to make it 2% or 3% if possible. This shows the seller that you are serious.
Cash is King! Now most first time home buyers won’t be able to make an all cash offer on their first home. But if you are, this will definitely make your offer stand out and it lets the seller know that you are serious. Because it’s an all cash offer, there is no loan approval needed from the lender. This can also potentially lead to a quicker closing which can sometimes be important to the seller.
Nice touch! Write the seller a letter. A personal letter to the seller is another way to make your offer stand out from the crowd. A handwritten letter telling them of all the things that you like about their house usually will strike a personal chord with them. Especially if you are a first time home buyer and letting them how excited you are and the new memories you will be making there. It also lets the seller know that you are serious.
I’m sure you’ve figured out by now that letting the seller know that you are serious about buying their home is a vital part of the offer process. Remember that you only get one chance to make a first impression.
Finally, trust your Buyer’s Agent. Your agent is morally, ethically, and contractually bound to represent your best interests. They are also in touch with local market conditions and in communication with the listing agent. The can, and should, use all available information to help you make a competitive offer. Don’t waste their expertise by ignoring their hard-earned experience and advice.
Ready to start shopping? Don’t miss the next post in this series, where I discuss inspections and appraisals.
Rob Reed is a REALTOR in St Petersburg, FL that specializes in working with first time home buyers.
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