Ready for another piece of
The Adventures of a First Time Home Buyer?
Good, cause you are gonna get it!
Part 5 ~ I'm gonna make em' an offer they can't refuse!
Okay, so you've found the one! The house that makes your heart flutter with excitement!
Now is the time to make an offer...but how?
This is where your AWESOME agent comes into play...she'll (or he'll) take into account the following:
Current market conditions. The market has recently significantly slowed in most areas. It's no longer a Seller’s market. In the past, properties have been selling quickly and usually for full price and in many instances, there were multiple bids. Now there are more homes available {unfortunately many are short sales}, prices have dropped and most Sellers are motivated to sell and are willing to negotiate.
We were very specific with the area we wanted to buy in. And although the market is sluggish, the area we wanted to buy in is booming, so the home prices weren't as low as they would have been if we were looking elsewhere. We knew this going into the process so we weren't surprised.
Days on market. How long has the house been on the market? Was it just recently listed? Or has it been sitting on the market for an excessive amount of time? If a home was just barely listed and you are the first person to make an offer the Seller probably won't take a very low offer. If the home has been sitting for quite some time the Sellers might be more willing to negotiate.
The first home we made an offer on had been on the market for almost 200 days. The Sellers had originally listed the home at $315,000 but had reduced the price to $270,000 by the time we got to it. Even with the large reduction in price they were still willing to negotiate with us. Now, we all know what happened with that home {if you don't, you can read about it
here}. The second home that we made an offer on had only been on the market for 2 days and although there was some back and forth we still feel that we got an amazing deal!
Fair market value. Is the house worth what they are asking? Your agent should do a Market Assessment report for you. This report will show what similar homes in the same area have sold for in the last 90 days and will give you a reasonable estimated value of the home you are looking at.
Both home we looked at were priced very close to what the Market Value showed. All I can say is, listen to your agent when coming up with a number. They see hundreds, probably thousands, of homes and know exactly what they can and will go for.
Low price offers. Before making a low offer think to yourself, “Why do we want to offer less?” Is it because of the Fair Market Value that your Realtor gave you? Is it because the home needs work? Or is it just because you want a lower house payment? The key to writing a lower offer is to do so without insulting the Seller.
In both instances, we made it clear to the Seller exactly why we were offering what we were offering. The first home needed a lot of cosmetic work and needed some repairs so making a low offer wasn't a surprise to the Sellers. The second home, however, was in much better condition and our offer to them could not be considered a low price offer. No matter what, expect a counter offer and be prepared to walk away if the price is above what you want to pay and/or other terms don't fit your criteria.
Strengthening your position. Do everything you can to convey yourself as a strong Buyer. Have a loan pre-approval letter that is specific to the specific property and put down as much
earnest money as you can. Your agent will draft a cover letter to accompany your offer that introduces you to the Sellers. It helps to make things more personal.
Keep it clean. Make your offer as simple and straightforward as possible. Avoid using too many modifications to the standard forms.
Items conveyed with the property. Your agent will have an MLS printout of the home that says which items (washer, dryer, refrigerator, etc.) are being conveyed along with the property. Make sure these items are included and specified in your offer.
Don't be afraid to ask the Sellers to leave the refrigerator {or anything else} if it's not part of the included items. In both offers we made the Sellers agreed to leave the items we asked for.
Once you've made your offer and the Seller has accepted, the real fun begins...it's called
WAITING!!!
Stay tuned for more fun in
The Adventures of a First Time Home Buyer
