Now that you’ve found the home that you’re interested in, it’s time to figure out how to make an offer on a property. Making an offer is not always as straightforward as you might think. If you want to make an offer that’ll stick, you’ll need to be familiar with the market condition as well as the fair market value of the home you are interested in. For instance, if you lowball your seller in a market that is unfavorable to you, then you could run the risk of losing the home altogether. On the other hand, if you don’t know the actual value of the property, you could end up overpaying. To help you start the home buying process, here are some tips on making an offer on a house.
Know the Market
One of the most important tips on making an offer on a house is to know your market. For instance, if you’re in a buyer’s market, you might be able to bid lower than the asking price. When sellers receive reasonable offers in a slow market, they are more than willing to negotiate. Keep in mind that the seller’s ultimate goal is to sell their homes as quickly as possible at a fair price. If you happen to be in a buyer’s market where there is an abundant supply of homes and a shortage of buyers, you have more leverage to lower the asking price, to ask the seller to pay for some of the closing costs, etc.
However, you must be more careful in a seller’s market. A seller’s market typically means that you will need to compete with several interested buyers, so low bids are not going to be considered. If you are shopping in a seller’s market, you will need to make an offer that is close to the asking price. Nonetheless, regardless of the market’s condition, it is still important to use whatever safeguards you have to protect yourself from unforeseen circumstances. Don’t hastily remove important contingencies, such as the option to reconsider after conducting a home inspection.
Dealing with a Rejected Offer
If your offer is rejected without a counter offer, you should ask the seller’s agent why. There are countless reasons why a seller may not want to move forward with an agreement. For one, the seller might have received multiple offers, and it could be that yours was not the most attractive, or the seller might have decided that it would be better wait it out for an even better offer.
If you learn that your offer was rejected because someone else had made a better one, find out whether or not the other offer was accepted. If the seller has already accepted the other offer, then you may need to shop for a new home. If that offer is still in negotiation, you may have time to move in with a new offer, in which case you should work with your agent to engage in a bidding war.
If you are a first time homebuyer, you will want to reach out to a buyer’s agent for more customized tips on making an offer on a house. An agent who is familiar with the local market and has experience in negotiating a home purchase will be an invaluable tool and teaching resource during the home buying process. Contact a Better Homes and Gardens real estate agent and learn how to make an offer on a property.