You've found it: the house of your dreams. In fact, you went home last night and played a little game of Where Does the Sofa Go? But before you can call that sweet home your home sweet home, there's a little matter of making an offer. And getting it accepted.
No matter what the market conditions, Trulia has a few suggestions that can take you through the offer process with flying colors. While we can't guarantee that your offer will be accepted, we can help you be in the most competitive position possible so you're one step closer to landing your dream home.
How much should I offer?
Before you get all excited in thinking that your dream home's listing price is just a place to begin negotiations, think again. The first conversation you should have is with your real estate professional. Begin by looking at comparables in the area for similar homes and recent sales. You can even do a little sleuthing on your own by searching on Trulia for sold homes in your area and choosing a time frame in the past three months for the most accurate results. Comparables will give you a better idea about the seller's asking price in relation to similar properties and help you shape your offer based on property-specific amenities and location.
Next, your offer should take into consideration how you're paying for your purchase: cash or financing. Cash offers can sometimes command a lower selling price since there aren't mortgage folks to deal with and the closing should go faster. If you're using financing but can offer a quick close (less than 30 days), take that into consideration in your offer. Your real estate agent might even want to call the listing agent to see if a quick close could sweeten the deal.
If you're thinking of submitting a lowball offer, have a candid conversation with your real estate agent. They'll know the market well and might even know a thing or two about the listing agent through previous sales. There are certain times when a lowball offer might start a favorable negotiation process, but there are many others where it can kill your dream home dreams. If you decide to submit an offer substantially below the listing price, be prepared for a negotiations process — or a flat-out "no."
When you're ready to make your offer, whether it be lowball or right at the listing price, back it up with everything that the seller needs to know that yours is the one offer they should look at twice. This means completed offer paperwork, signatures where they belong, and making sure that you're asking for seller concessions that make sense for the market.
Recap: Check comparables, take your financing into consideration, and establish a price range with your agent that will be reasonable and in-line with current market conditions.
How about those seller concessions?
Maybe you're looking to have some of your closing costs covered. Perhaps you just want the carpeting replaced because it's seen better days. Asking for seller concessions is a normal part of the offer process, but it helps to know what you can reasonably expect. If you're in a competitive bidding situation, odds are that the seller is going to choose the offer with the least amount of work on their part. Work with your real estate professional to make a list of "musts" and "would like tos" for seller concessions. Then, you can put these side by side with your offering price and see what makes for the most compelling deal. Bottom line? If you're entering into a negotiation and something's gotta give, your requested concessions might be the first place you're willing to bend in order to stay competitive.
Anything else I need to know?
One aspect of the offer process that many buyers forget from the get go is to set a maximum price. When markets, or even individual properties heat up, listing prices can fade away to mere suggestions. Sit down with everyone involved in the offer process, from your family to your real estate professional, and set a max price. If you're financing, you will have a purchase ceiling from your mortgage lender, but when the perfect home comes along, it's easy for heart strings to overrule good financial sense. How much can you comfortably carry as a mortgage payment each month? How much is that home really worth? How long do you plan on staying in the home, and does that justify a higher than asking price?
Don't put yourself in an uncomfortable financial position because there are multiple people who want to call your dream home...home.
And finally, the tips we're including here are for traditional sales, not short sales or bank-owned properties. Those types of transactions have nuances all their own.
Happy house hunting, think strategically, and may the odds be ever in your favor.
This article 3 Tips for Crafting Tempting Offers that Sellers Will Love originally appeared on Trulia Tips.
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