Buying a house is a journey that can take a while and has many exciting prospects and disappointments. This is undoubtedly the case in a seller’s market when homeowners receive offers at or above the asking price.
While it might seem like an impossible dream, you can succeed in making an offer on a property and getting the house you love.
Here is a guide to help you through the process.
One of the things you need to remember when you are ready to make an offer on a house is to focus on what you believe the seller will accept. Sellers tend to boost the price to leave room for some negotiation so be willing to go back and forth a little.
**Please Note** During unprecedented seller’s markets like Australia has been experiencing, the seller may not budge on the asking price. In this situation, you understand your financial limits and proceed based on facts. A bidding war with other potential buyers will never benefit you. Once you make your best offer, be prepared to walk away rather than get in over your head.
Making a House Offer Tips
As a prospective buyer, you have to remember that this is a process. You rarely, if ever, hear about a buyer bursting in the door ready to sign the contract. It is a huge decision for you to buy and for the present homeowner to sell.
- Do Your Research – Do your homework on the area and find out the selling price for similar houses in the vicinity. Being able to justify your offer, makes your offer easier to understand. Also, check for reasons why the house price could be reduced.
- Make You First Offer Realistic – Even though the sale of a house is a business transaction, many people have decades of emotions tied up in their homes. An exceedingly low offer can be seen as an insult to some sellers and send the negotiations off track right away.
- Add Reasonable Conditions – Staying with general conditions such as pending a building and pest inspection or pending valuation. Once these are complete, you will know if you have any leverage for negotiation.
- Avoid Looking Over-Eager – No matter how much you love a property, do not rave on and on about how perfect it is in front of the seller or their agent. Curb your enthusiasm.
- Remain Patient – Once you find the house you want and have made your offer, your best course is to wait. Sending another offer will send the message that you are desperate for the house. However, you can walk away if you do not receive a timely response.
- Learn What You Can About the Seller and Their Circumstance – While the seller’s agent is not obligated to answer your questions, some will share information.
- How long has the house been on the market?
- Has the price changed during the time it has been listed?
- How did the seller decide on the asking price?
- Why is the home for sale?
- Have there been other offers?
- What do they consider a fair offer?
How to Put an Offer in on a House
Now that you are ready to put in your offer, there are still a few steps to take.
1. Financing Pre-Approval – If you have not already, get your loan pre-approved. This makes your offer more attractive to the seller because there is less chance the financing will fall through.
2. Consider Potential Conditions of the Sale – Typically, your conditions involve finance, the results of relevant inspections, or if maintenance needs to be completed before settlement.
3. Review the Contract of Sale – Before preparing and submitting your offer, make sure you have not missed any details in the contract. The contract of sale will spell out the deposit, due date, settlement date, and other essential items. When dealing with contracts, you may feel more comfortable enlisting help from a buyer’s agent.
4. Prepare Your Offer – You should make your first offer between 5-10% lower than what you can pay. As a buyer, you need room to negotiate rather than come in immediately with your best offer.
5. Sign the Contract of Sale – It is not legally binding until you and the seller sign the contract. Do not be put off if the agent for the seller asks you for a small holding deposit as a show of good faith until the contract is binding.
6. Arrange Required Inspections – Several inspections must be completed before the sale of the property. These include pest and building inspections to make sure the property is up to code. As the buyer, you need to be sure that there are no problems with pests or other potential issues.
7. Wait for the Cooling Off Period to End – During this time, all the loose ends of the sale are tied together. Once all conditions are met, you can celebrate buying your new home.
Buying a house or property can be a challenge. Whether you are looking to buy your first house or your 50th, making an offer on a house can be stressful. Fortunately, you do not need to go it alone. The experienced real estate team at Nest Reality has helped hundreds of home buyers, and they can help you too.