You’ve been hunting for that perfect home and you finally found one! The price is right, and you are considering making an offer. In such an aggressive market you want to be sure you make a strong offer hoping your dream of making this home yours becomes reality!
Freddie Mac covered “4 Tips for Making an Offer” in their current Executive Perspective. We will explore the 4 Tips they disscuss along with some additional things to consider:
1. Know What You Can Afford
“While it’s not nearly as fun as house hunting, fully understanding your finances is critical in making an offer.”
This is the first step before you begin your home search.
As we’ve previously stated before, getting pre-approved for financing is very important and will show home sellers that you are a serious buyer and will give you confidence that you have been approved for the amount you are offering. It will also allow you to know if you will be financially able to make any required repairs or updates (new roof, furnace, kitchen, etc)
2. Act Quickly
“Even though there are fewer investors, the inventory of homes for sale is also low and competition for housing continues to heat up in many parts of the country.”
In the current Existing Home Sales Report, the home inventory is now at a 3.6-month supply; This is significantly below the 6-month supply that is seen in a normal market. Buyer demand is very strong and continues to outpace the home supply, creating a very competitive market in which buyers are competing with each other for their dream home ambitions.
It is crucial that as soon as you decide that you want to write an offer, advise your agent to write an offer and present it as soon as possible.
3. Make a Strong Initial Offer to Purchase
Freddie Mac offers this advice to help make your offer the strongest it can be:
“Your strongest offer will be comparable with other sales and listings in the neighborhood. A licensed real estate agent active in the neighborhoods you are considering will be instrumental in helping you put in a solid offer based on their experience and other key considerations such as recent sales of similar homes, the condition of the house and what you can afford.”
Think about ways to make your offer stand out! We have seen a lot of buyers lately write a personal letter to the seller letting them know how much they love the home and reasons to accept them as the buyer. Ask your agent to get creative and consider any other ways to make your offer could stand out!
4. Be Ready to Negotiate!
“It’s likely that you’ll get at least one counteroffer from the sellers so be prepared. The two things most likely to be negotiated are the selling price and closing date. Given that, you’ll be glad you did your homework first to understand how much you can afford.
Your agent will also be key in the negotiation process, giving you guidance on the counteroffer and making sure that the agreed-to contract terms are met.”
Once your offer to purchase is accepted, Freddie Mac recommends you “always get an independent home inspection, so you know the true condition of the home.” The inspection may discover defects or issues that you can then discuss and negotiate with the sellers, or cancel the offer to purchase. This process can be complicated with many options available to the buyer and seller to resolve any discovered issue. Your agent will be able to guide you through this process.
Regardless if this is your first purchase or your third, having a local professional real estate agent on your side who is an expert in the market is crucial to ensure the process goes smoothly. Happy Hunting!