Buyer’s Tip # 4: Making an Offer
Buyer’s Tip # 4: Making an Offer
You’ve spent the last fewmonths searching with your agent to find the right home. Now all that standsbetween you and a pending sale is the right offer! Making an offer on a homemay seem daunting, but it doesn’t have to be. Learning the process, knowingyour limits, and working with your real estate agent are crucial factors incrafting a strong offer.
TheOffer Process Overview
This process generally starts with finding a home that you want to place an offer on. Once you are ready, you should contact your real estate agent. Your agent will immediately reach out to the seller’s agent to get more information on the listing, such as if they are still accepting offers if they currently have any offers on the table, or any facts pertinent to the sale of the house.
From here, your agent will share similar homes that have recently sold to help determine the best offer price and will discuss an offer strategy that includes an initial offer and room for later negotiations. Keeping room for negotiations is crucial, especially in today’s seller’s market. Your agent will then draw up a formal offer, send it to you for your signature, and submit it along with a confirmed pre-approval letter and proof of down payment to the seller’s agent.
The Seller's Review Time
Unless specifiedotherwise, sellers have 3 days to review the offer. The seller will eitheraccept, reject, or make a counteroffer. If a counteroffer is proposed, youragent will recommend a plan and then start negotiations with the listing agent.It's usually because the seller either wants more money or a faster closing. Ingeneral, negotiating is a good sign—it typically means both parties want tomeet somewhere in the middle. That said, you may reach an agreement quickly, orgo through multiple rounds so be patient. Once you and the seller agree on theprice and terms, you'll both sign the purchase contract. Now the offer isofficially accepted, and you and the seller enter escrow.
StrengtheningYour Offer
In most cases, the offer that gets accepted is the one that has the price, terms, and closing timeline that best matches what the seller wants. Although you can never be sure as to what that exactly might be, there are ways to give yourself an edge. Things like an increased initial deposit or a shortened contingency period can be helpful. Write a cover letter about yourself, include photos, and add details of what you love about the home. You can also be flexible about the closing date if that will win an advantage. During negotiation think carefully before renegotiating your offer price, and consider an escalation clause. Remember, each seller is different, and it’s tough to win your first offer. Ask your real estate agent if there’s anything else you can do to make your offer more appealing.
Dealingwith a Rejected Offer
Most buyers go through atleast one rejection before finally landing the right home. It can bedemoralizing but try not to take it personally. These experiences are animportant opportunity to learn and re-examine your strategy if needed.
Ask your agent to explainwhy your offer was rejected. Sometimes there’s no rational reason. Perhaps theseller just got cold feet about selling. Typically, it comes down to a fewdifferent factors. Your offer could be too low, and the seller doesn’t want to counterat that price. Maybe the seller received multiple offers and simply decided togo with another one. Or the seller wants a specific term met, such as an allcash offer or a quick escrow and is waiting out for buyers that will meet thoserequirements. Regardless of the reason, talking to your agent about it willensure a more successful offer in the future.
YourAgent
When the time comes todraft an offer, you’ll likely have some anxious emotions and a heightened senseof competitiveness. Keeping your cool, making rational decisions, and trustingyour agent will go a long way in a successful purchase.
Your agent should guideyou at every step of the way and go the extra mile for you. You should expectthem to develop a rapport with the listing agent to determine the best way tocommunicate between parties. Inconversing with them, your agent should discover any terms that may help strengthenyour offer. They should research the seller’s agent's previous listings andcommon pricing strategy. Additionally, when writing your offer, your agentshould suggest tactics that can gain you a competitive edge. They should also briefyour lender on the property to identify any potential issues that could impactfinancing.
As you can see, havingthe right agent is crucial when making an offer on a home. Working with theright agent can make all the difference – from nabbing the best purchase priceto getting your offer approved and having a smooth escrow and close. Workingwith a Levine Homes Agent will ensure that you’ll have a local expert andskilled negotiator on your side.
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